Toshiba Said to Be Near More Than $2 Billion Deal for Landis+Gyr

Toshiba Corp. (6502) is near an agreement to buy Landis+Gyr AG, a Swiss electronic-metering company, for more than $2 billion, said two people with knowledge of the matter.

The companies may announce the sale in the coming days, said the people, who declined to be identified because the details are private. Tokyo-based Toshiba beat private equity firms TPG Capital and EQT Partners AB, which also submitted takeover proposals by a May 9 deadline, the people said.

Toshiba, which lost a bid for Areva SA’s power-grid business in 2009, is seeking to expand its energy operations to transmission equipment as countries such as the U.S. invest in upgrades of their electrical systems. Landis+Gyr, based in Zug, Switzerland, makes smart meters that allow utilities to check energy use remotely and can be connected to equipment that shows customers when rates are highest.

“For Japanese firms such as Toshiba, an acquisition is a quick way to expand in the smart grid-related businesses after focusing mainly on information technology operations,” Masahiko Ishino, an analyst at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo, said earlier this week.

Calls and e-mails to a spokeswoman at Toshiba International’s office in Houston weren’t immediately returned. Keisuke Ohmori, a Toshiba spokesman in Tokyo, declined to comment on any specific bid earlier this week and said the company is working on the smart grid business in a “variety of ways.”

Largest Smart Grid

“We don’t comment on rumor and speculation,” Thor Valdmanis, a spokesman for Landis+Gyr, said by phone.

Founded in 1896, Landis+Gyr operates in 30 countries with about 5,000 employees offering meters for clients including E.ON AG, Centrica Plc (CNA)’s British Gas unit and PG&E Corp. The company is controlled by Australian investment firm Bayard Capital.

Owen Blicksilver, a spokesman for TPG, declined to comment. Johan Hahnel, an EQT spokesman in Stockholm, didn’t immediately return a call seeking comment.

In January, Landis+Gyr was chosen by State Grid Corp. of China to help build the world’s largest smart grid, agreeing to supply more than 10,000 commercial and industrial advanced electricity meters in six Chinese provinces.

Toshiba, which makes power-generating equipment including nuclear reactors, is expecting sales of 700 billion yen ($8.6 billion) from “smart grid” and “smart communications” businesses, the company said last year.

A smart-grid system more efficiently regulates use of energy from the main grid and independent sources by using current that fluctuates like solar, wind and biogas and storage of the energy they produce. The network reduces reliance on a centralized energy source, better handling spikes in demand and reducing likelihood of power disruptions.

Landis+Gyr has been working with Credit Suisse Group AG and Lazard Ltd. (LAZ) to examine options, including a sale.

To contact the reporters on this story: Brett Foley in London at bfoley8@bloomberg.net; Aaron Kirchfeld in Berlin at akirchfeld@bloomberg.net.

To contact the editor responsible for this story: Jeffrey St.Onge at jstonge@bloomberg.net

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