Schneider to launch €1.2 billion bid for smart-home device maker Shelly

Schneider Launches €1.2 Billion Takeover Bid for Smart-Home Maker Shelly

Schneider Electric's Acquisition of Shelly Group: Details and Market Impact

By Nathan Vifflin and Basile Day

Overview of the Takeover Offer

Sept 24 (Reuters) - France's Schneider Electric intends to launch a voluntary public takeover offer for Bulgarian smart-home device maker Shelly Group for €70 per share, the industrial group said on Thursday.

Shares in Shelly, listed in Sofia and Frankfurt, were up 4.3% by 0859 GMT, while Schneider slipped 0.5% lower.

The all-cash offer values Shelly at about €1.2 billion ($1.4 billion) and is expected to close by the first quarter of 2027, Schneider said in a statement.

Offer Premium and Shareholder Agreement

The offer price represents a 27% premium to Shelly's unaffected reference price as of July 28, and is 22% higher than its current price.

Shelly's two founders, Dimitar Dimitrov and Svetlin Todorov, hold roughly 57% of the share capital between them. Both have conditionally agreed to sell their stakes.

Strategic Rationale and Market Position

Expansion into the Connected Home Market

The deal would push Schneider deeper into the connected home market, where it competes with French rival Legrand, Sweden's Plejd and Switzerland's ABB.

Analyst Perspectives

Market Value and Acquisition Scale

Analysts called the purchase small for Schneider, whose market value is about €165 billion.

It looks like a "sensible bolt-on acquisition that is a continuation of their smart buildings strategy", RBC Capital Markets analyst Mark Fielding said in an email, noting the price was less than 1% of Schneider's market capitalisation, with an operating profit contribution of a similar scale.

Synergies and Strategic Fit

Jefferies said in a note the deal had "strong rationale and high potential for synergies" with Schneider's residential business, which accounts for about a third of its buildings exposure. 

Shelly Group's Growth and Product Portfolio

Shelly, which offers smart plugs, meters, locks and cameras alongside cloud services, has grown its revenue by more than 40% per year since 2022.

Additional Information

($1 = 0.8790 euros)

(Reporting by Danny Callaghan, Nathan Vifflin, Basile Day in Gdansk, editing by Milla Nissi-Prussak)