Looking at the Advantages of Water and Gas Distribution in Instrument Industry from Enterprise Acquisition

In the past two days, Honeywell purchased instrument company Elster and became a hot topic in the industry discussion. This reminds us of the situation when Toshiba bought Switzerland's Langier four years ago.

● In May 2011, Toshiba announced that it has agreed to purchase Swiss electronic measurement product manufacturer Landis Gyr for US$2.3 billion in cash and bonds to promote the development of its smart grid business.

● On July 30, 2015, Honeywell announced the signing of a final agreement to acquire Elster from Melrose Industries plc. According to the agreement, the acquisition cost is approximately US$5.1 billion. Honeywell stated that the purchase price is 12.6 times that of Elster's 2015 EBITDA.

It is also a major global strategic growth initiative for international companies. Elster and Langier are also advanced companies in the world of metrology, and why the purchase price is more than double the price. Apart from other factors, perhaps from the perspective of the strategic deployment of the two multinational corporations, it may be obvious. When it comes to Langeir, industry insiders generally feel that Rangir is very strong in terms of electricity, and the hot industry is also involved. However, water vapor appears to be weaker.

Elster Water and Electricity

Looking back at Elster, this is a company that is fully flourishing in the natural, power and water industries. The involvement of multiple industries will enable it to bring new attractive business extensions to the company, which will increase its global growth position. . For example, the products provided by Elste's gas business have a high demand among natural gas customers, which can provide a powerful global distribution network for existing Honeywell technologies and products.

The full blossom of Elster's three industries can also be found in China. In 2001, Elster and China’s Chongqing Qianwei Technology Group Co., Ltd. jointly invested in the formation of the Chongqing avant-garde Krom Watch Industry. It is mainly engaged in the research, development, production and sales of gas meters, pressure regulation metering products, and gas detection equipment. On December 21, 2010, Jiangxi Sanchuan Water Meter Co., Ltd. and Elster Asia Co., Ltd. formally signed the "Jiangxi Sanchuan Elster Water Meter Co., Ltd. Joint Venture Contract" in Yingtan, Jiangxi, and jointly invested in the establishment of a Sino-foreign joint venture Jiangxi Sanchuan Ang. Seoul Water Meter Co., Ltd., the production scale can reach annual output of 200,000 sets of large-diameter water meters.

International giants Shen Shusi & Ah Chuang

The Shinshus Group leads the development of industry solutions and provides smart meters, communications systems, software and services for utilities such as water supply, power supply and gas supply. The growing global market demands innovative technologies and services for utilities such as power supply, water supply, and gas supply to increase efficiency and reduce costs and losses. In order to meet this requirement, Shinshus decided to centralize various global market functions into a single goal, that is, everything is customer-centric.

Ever since its inception in the 19th century, Accton has been engaged in gas metering and metering business, and in the 1970s reorganized to form electricity, gas, water, heat, and control metering business segments. In 2007, Itron acquired Actaris (Atopol), which made it more comprehensive in all aspects of water and heat. The company has more than 25 million global delivery meters and 10 million Cyble remote transmission modules. Its sales area covers more than 130 countries and regions in the world.

New Internet Business Opportunities With the development of the energy internet and the increasing global demand for energy management, how the Chinese traditional three-table companies can achieve transformation and increase their own value has become a topic of concern. In particular, with the increasing application of new smart technologies, software, and data analysis around the world, the development of utility metering is changing with each passing day, and the metering business of the three industries of water and electricity will show strong growth momentum in the world.

Small make up

We cannot say that this extra 2.8 billion yuan is entirely due to Elster's water and gas advantages, but this is indeed one of the reasons that cannot be ignored. With the development of the Internet, the connection and development of the three forms and even the four forms are moving at a high speed to a new era. At the same time, strategic layout in multiple industries can indeed increase the market acceptance and share of large international companies. On the other hand, giant mergers and acquisitions occur frequently, and the significance behind this is nothing less than looking at the market for smart metering in the future.

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