Schneider Electric is in the beginning stages of considering a takeover offer for Tyco Int’l although no deal is imminent, Bloomberg reported this week.
Schneider is working with bankers to help it weigh up a potential purchase of Tyco, Bloomberg reported on its Web site Tuesday, citing anonymous sources with knowledge of the matter.
Tyco could command a $32 billion price tag, according to the report. Analysts said any deal this size would face significant obstacles, not least funding. Credit Suisse analysts called the deal very unlikely because it was outside Schneider’s core strength in factory automation.
On Wednesday, Schneider issued a statement that it’s “not currently” in takeover talks with Tyco after its shares fell nearly 10 percent on the reports. However, Bloomberg noted that Schneider has been looking to expand factory automation and building controls to keep up with competitors like Siemens and Honeywell.
Even if Schneider’s reported courtship does not materialize, there are likely other suitors for pieces of Tyco such as United Technologies Corp. (UTC), Honeywell and Siemens, according to Reuters.
Schneider purchased Pelco in 2007, adding the business to its building automation segment.