Itron gets OK to buy unit of Schlumberger
After months of review, U.S. antitrust authorities Thursday approved the sale of Schlumberger Limited’s automated meter reading equipment unit to Spokane-based Itron Inc.
But officials at the Federal Trade Commission said Itron first must give a competitor full access to key technology so the sale doesn’t leave Itron with a monopoly in the mobile automated meter-reading market. That market is primarily among electric power utilities in this country and overseas.
Almost a year ago, Itron and Schlumberger, based in South Carolina, announced a deal that would transfer Schlumberger’s automatic-meter-reading production and sales operations to Itron. The purchase price was announced Thursday as $248 million, subject to later adjustments by both companies. The deal is expected to be completed later this summer.
Itron officials have said the Schlumberger purchase will boost its plans to sell comprehensive technology services to its utility customers.
“Schlumberger is the market leader in state-of-the art electricity meters, with a long track record of strong revenue, earnings and cash flow,” LeRoy Nosbaum, Itron’s chairman and CEO, said in a statement. The acquisition “provides our customers with a more highly integrated suite of products and a broader, more attractive array of value propositions.”
Itron develops and sells encoder-receiver-transmitter (ERT) technology that goes inside meters built by Schlumberger and other manufacturers. The ERT modules include circuits that gather consumption information from an electricity meter and then use radio signals to transmit it to data-collection devices. That system replaces the older model of meter reading done by door-to-door physical inspection.
Itron also supplies the radio-operated collecting devices to utilities.
Utility-industry trends have forced the production of automated meter-reading equipment with the ERT components already built in. That trend left Itron the choice of eventually losing its market share or consolidating with its largest meter-component competitor, Nosbaum has said.
Under the FTC agreement, Itron promised to license at no cost its mobile radio-frequency meter-reading technology to Minnesota-based Hunt Technologies Inc.
The FTC said without that stipulation, Itron stood to dominate 99 percent of the automatic meter-reading market in the United States.
The FTC agreement also specified that Itron must provide Hunt with 200 hours of technical assistance at no cost. In addition, Itron must provide Hunt with any updates to its ERT technology for three years.
The proposed order will allow the FTC to appoint an interim monitor, if necessary, to ensure that Itron complies with the agreement.