Schneider Electric to acquire Invensys for £3.4bn France's Schneider Electric on Wednesday said that it had agreed a friendly offer to acquire Invensys in a deal valuing the British engineering firm at £3.4bn. Schneider, a bellwether of European industry, confirmed the offer as it reported first-half results that came in slightly above analysts" expectations. The company said that its cash-and-shares offer, first mooted earlier this month, had an implied price of 502p per Invensys share or a 14 per cent premium to the company's closing price before announcement of the discussions. Wednesday's offer, which Invensys said it would recommend, involves 372p in cash and 130p equivalent in shares. Earlier in the month, the company, which produces control systems and software, said that talks were taking place around an offer of 505p, though this carried a smaller cash component. In a statement, Schneider Electric said the deal would produce annual synergies of about €400m by 2018. The City has long considered Invensys a prime takeover target - a label that stuck even more firmly last year following the disposal of the engineering group's rail division to Siemens of Germany. The sale allowed Invensys to use some of the £1.7bn proceeds to almost erase its hefty pension deficit, which had previously acted as a poison pill to an earlier aborted approach by Emerson Electric of the US in June 2012. At the time, Invensys had a pension deficit of £490m. The disposal of its rail division allowed Invensys to plough £400m into its underfunded retirement scheme, and keep a further £225m into a reservoir trust. The Siemens deal was considered something of a coup by Invensys, given that the £1.7bn sale price nearly matched the engineer's market capitalisation of £1.8bn the day before the deal was announced. Schneider's first cash and stock proposal was issued at 505p, which prompted Invensys's shares to rise 15 per cent on the day, partly in expectation of a bidding war. But since the approach from Schneider, no other potential suitors have emerged. General Electric, which many saw as a potential acquirer of Invensys, recently effectively ruled out any move for the UK company.