After rising more than 20 per cent in late trading on Wednesday afternoon, when the deal was announced, shares in Invensys gained another nine per cent yesterday, closing at 305.8p and valuing the firm at almost £2.3bn. Analysts at RBC said the sale increased the likelihood that Invensys could become a bid target once the deal is completed in the middle of 2013, having admitted to early interest earlier this year.
“The disposal of rail leaves Invensys more focused on automation and eliminates the UK defined benefit pension net deficit, thereby removing two major obstacles for potential acquirers,” said RBC’s Andrew Carter.
Meanwhile Siemens promised investors that the deal would contribute to boosting its profits in a tough economy. The engineering conglomerate, Germany’s most valuable company, aims to save €6bn (£4.9bn) and focus on its core areas of expertise to close a gap with rivals such as ABB and General Electric.
The deals will lift the operating profit margin of Siemens’ Infrastructure & Cities (I&C) division by more than one percentage point in fiscal 2014 from 7.5 per cent last year, I&C chief executive Roland Busch said.
“We are investing in our profitability. We see a margin improvement ... as validation,” Busch said.