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Toshiba acquires Landis+Gyr for $2.3B

Posted: 23 May 2011 ?? ?Print Version ?Bookmark and Share

Keywords:acquisition? energy management?

Toshiba Corp., a provider of services on electronics and social infrastructure systems, announced that it has entered into a definitive agreement to acquire the entire equity of Landis+Gyr AG, a company incorporated in Switzerland and a global provider of energy management solutions for utilities, from the company's shareholders and warrant owners.

The acquisition, valued at $2.3 billion (approximately 186.3 billion yen) including net debt, will substantially enhance the scope of Toshiba's Smart Grid and Smart Community businesses. This will also position the company as a global competitor with world-class capabilities. The acquisition is subject to regulatory approvals and other customary closing conditions.

Projects to establish smart grids are being promoted by countries and regions around the world, toward achieving the modern and more environmentally friendly infrastructure essential for a low carbon society and sustained economic growth. Forecasts indicate that the next decade will see the smart grid market to grow to $71 billion (approximately 5.8 trillion yen), six times today's level.

While the original Smart Grid business of Toshiba mainly covers power system network management, the latest trend is a shift to a higher level concept, 'Smart Community.' This supports diverse infrastructure systems, including energy, water, transportation and ICT; delivers comprehensive solutions to consumers; and secures the integrated modernization of the overall infrastructure supporting entire towns and cities.

Claiming to be an innovator in environmentally conscious businesses that support realization of a low carbon society, Toshiba Group positions the Smart Community business as a new focus area and is determined to maximize its presence and capabilities in the business.

On the other hand, Landis+Gyr provides a wide range of smart meter solutions, from advanced interactive communication technologies to various applications and services based on data collected from the meters. It was established in 1896 and now with over 8,000 utility customers globally. The company pioneered the development of leading-edge smart metering, networking and service products to meet the needs of the utilities industry. Its business operations now extend to 30 countries and regions across five continents.

The combination of Landis+Gyr's advanced smart metering technologies and services, plus its extensive customer base, with Toshiba's comprehensive expertise in energy management for utility companies and the corporate (buildings) and consumer (homes) sectors, will allow Toshiba to provide customers with sophisticated one-stop solutions that offer communities optimum power monitoring and management, plus effective applications and services based on cloud computing technologies.

By drawing on the diverse capabilities of each company and maximizing synergies, Toshiba will enter new business domains encompassed by the Smart Community concept, centering on integrated energy management systems.

Upon completion of the acquisition, Toshiba will promote operational and technological synergies and further growth in its Smart Grid and Smart Community businesses, toward achieving net sales of $9 billion (approximately 700 billion yen) in fiscal year 2015, against current annual sales of $3.7 billion (approximately 300 billion yen).

Business operation after the stock acquisition

Toshiba and Landis+Gyr said they will together develop total energy solutions that meet diverse hardware and software standards and deliver Smart Grid and Smart Community products and services worldwide.

Landis+Gyr, as a standalone growth platform within Toshiba, is expected to continue to hold its properties, equipment, employees and trade mark rights, and will expand and reinforce business by making use of complementary relations with Toshiba. The company will aim to expand orders received in Europe and the United States, and in China, India and Brazil, which are promoting rapid modernization of social infrastructure.

Landis+Gyr is expected to exploit synergies with Toshiba's energy management business to create new business opportunities. Beyond this, Toshiba and Landis+Gyr will be cooperating closely in developing and executing business strategies and promoting operations.

As its works to maximize synergies with Landis+Gyr, Toshiba will be continuing to promote alliances with leading-edge companies around the world, centering on cloud computing and solutions services, aiming to expand its global operations and to grow the Smart Community business.

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