The sale is expected to close in the third quarter of this year, subject to regulatory approvals, the company said in a statement. Toshiba will gain access to Landis+Gyr’s customers in 30 markets in countries including the United States and Europe.
The acquisition can also help the company compete with domestic competitors. Last
Wednesday, six Japanese companies, including electronics veterans Hitachi and Sharp Corporation, teamed up as contractors for a joint smart grid project in Maui, Hawaii Island.
Based on reports from Reuters, Toshiba seemed to have outbid General Electric Co., which reportedly offered $2 billion, Honeywell and ABB in a bidding war brewing in the past months. The company previously lost a bid for Areva S.A.’s power grid business Areva T&D in December 2009 to a French consortium of Alstom S.A. and Schneider Electric, for 4.09 billion euros.
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Major shareholders of Landis+Gyr include Allianz Capital Partners; Australian Capital Equity; DLJ Merchant Banking Partners; Dubai International Capital; Marinya Holdings; Sir Douglas Myers, one of New Zealand’s richest men; Sir Anthony O’Reilly, Ireland’s first billionaire; Propel Investments; and Sofina S.A.
Valuable
Founded in 1896, the Zug, Switzerland-based firm makes smart meters that allow utilities to check energy use wirelessly in real-time. More advanced models can also be connected to appliances to control their consumption.
Landis+Gyr is one of the big five smart meter companies currently leading the smart grid market, which include G.E., Itron Inc., Sensus and Elster. It earned about $215 million on $1.59 billion in annual revenues last year.
A Pike Research report last November said that most American utilities favor smart meters from the Swiss smart meter maker over Itron Inc., which was formerly the top smart meter supplier. Landis+Gyr now accounts for 26 percent of the country’s market share, followed by Itron with 24 percent, Sensus with 21 percent, General Electric Energy with 20 percent and Elster with 5 percent.
In the United States alone, more than 90 utilities have 57.9 million smart meters planned and on the way, according to Pike. Globally, smart meters are supposed to be a $3.9 billion industry by 2015, with 250 million meters installed. North America will be reaching 55 percent of all electric meters by the same period, data from the research agency showed.
Hiccups
Landis has over 8,000 utility customers globally, including notable names like E.ON A.G., Centrica P.L.C.’s British Gas Unit and Pacific Gas & Electric Company. In January, Landis+Gyr was also chosen by the State Grid Corporation of China among other smart grid makers to supply more than 10,000 commercial and industrial advanced electricity meters for six provinces in what will be the world’s largest smart grid.
Despite Landis+Gyr’ positive market reception overall, the firm has its share of problems with customers using its smart meters, particularly in the United States. PG&E reported on May 4 that it found that roughly 1,600 of wireless electricity and gas meters called SmartMeters across Northern and Central California overcharged customers when the devices got too hot.
The utility began its smart meter program in 2006 and is spending $2.2 billion to install 10 million electric and gas smart meters. It has installed about 8 million so far, 2 million of which was supplied by Landis+Gyr.
