LONDON â€" Siemens, the largest diversified industrial group in Germany, has agreed to buy the rail signaling business of the British company Invensys for 2.2 billion euros, or $2.9 billion.
Under the terms of the deal, which were announced late on Wednesday, Siemens said it was acquiring Invensys Rail, the signaling systems unit of the British company, in an effort to expand its market share in the rail automation sector.
‘‘With the addition of Invensys Rail, we are in an excellent position to offer best-in-class solutions and technology to rail operators worldwide,'' Sami Atiya, head of Siemens' mobility and logistics division, said in a statement.
Invensys, an engineering and technology company, said it would return £625 million from the deal to investors. Shares in the company rose 10 percent in morning trading in London on Thursday.
Siemens, whose stock price increased by less than 1 percent on Thursday, said it expected to achieve ar ound 100 million euros of cost savings related to the acquisition by 2018. It plans to combine the Invensys rail signaling operations, which have annual revenue of around £800 million, with Siemens' own rail automation division, according to a company statement.
Siemens also added that it would be selling its baggage handling, postal and parcel sorting units. The divisions have combined revenues of around 900 million euros.
The deal for Invensys Rail is expected to close in the second quarter of next year.
JPMorgan Chase, Ondra Partners and the law firm Freshfields Bruckhaus Deringer advised Invensys on the deal.
