Schneider purchaes BEI Technologies

Schneider Electric enhances its position in customised sensors with an agreement to acquire BEI Technologies Inc in France

Schneider Electric and BEI Technologies announce today that they have reached a definitive agreement for the acquisition by Schneider Electric of all the shares of BEI for $35 per share in cash.

The transaction, which is recommended by the board of directors of BEI, values the company at approximately US$ 562 million including net financial debt of approximately US$ 29 million.

BEI Technologies is a leading specialist in customised sensors with annual sales of more than US$ 300 million.

This acquisition, which is subject to certain conditions, fits the Schneider Electric strategy of selective targeted acquisitions to build up attractive growth platforms for the group in markets adjacent to its core historical offerings.

BEI Technologies has.

* A leading specialist position in customised sensors with strong growth potential.

* Technology leadership with strong capabilities in the quartz sensing technologies.

* Demonstrated ability in adapting technologies to different end markets and applications.

* Strong positions in key end-user markets (transportation, aero-defense and industry) via long - term relationships with large and diverse customers.

* Solid growth track record with a 15% compounded annual organic growth in sales since 1997.

* Well established leader in the fast growing inertial sensors market.

* Potential benefits from increased penetration of Electronic Stability Control in automotive.

* Potential benefits from a strong new product pipeline focusing on next sensing generation.

A transforming acquisition for the customized sensors platform, customised sensors represent a significant growth opportunity for Schneider Electric.

The targeted market has a size of US$10 billion and is growing at 7% to 8% per annum driven by.

(i) heightened focus on security, guidance and control of applications in transportation, aero-defense and industry.

(ii) increasing penetration of automation and embedded intelligence in applications with growing need for high precision sensors.

(iii) development of control and diagnostic by electronic measurement (microprocessor).

The acquisition of BEI Technologies will create a sizeable and valuable leading customised sensors platform with doubled size and earnings growth prospects.

This platform, which already includes Crouzet Automation and Kavlico, will strongly benefit from their respective market positions and technologies.

It will provide the most comprehensive range of products based on cutting-edge technology, with leading market positions in inertial sensors (# 1 worldwide in quartz technology for gyros), position sensors and pressure sensors for the transportation, aero-defense and industrial markets.

Henri Lachmann, Chairman and CEO of Schneider Electric, commented: "This acquisition of a leading customised sensors specialist with strong brand names and excellent reputation for innovation and performance is a breakthrough for our customised sensors platform.

BEI brings us outstanding competencies and significant potential for cross-fertilisation with Crouzet and Kavlico.

We are confident that our platform will now benefit from critical size and have the ability to set the standards in the attractive customised sensors market".

Charles Crocker, Chairman and CEO of BEI Technologies commented: "We believe the combination of BEI and Schneider Electric will establish a strong platform that will create significant new opportunities to accelerate sales and marketing, technology, research and development, and expansion of sensors based products in the marketplace".

Transaction details.

Under the terms of the proposed transaction, Schneider Electric, via a wholly-owned acquisition subsidiary, will make a tender offer to acquire all of the issued and outstanding shares of BEI Technologies for a price of $35 per share in cash.

Following successful completion of the tender offer, any shares of BEI Technologies that have not been tendered will be acquired in a cash merger at the same price.

It is further proposed that, after acquiring BEI Technologies shares pursuant to the tender offer, the Schneider Electric acquisition subsidiary will merge with and into BEI Technologies.

The Boards of Directors of each of Schneider Electric and BEI Technologies have authorised and approved the proposed transaction.

The Board of Directors of BEI Technologies has.

(i) determined that the tender offer is fair to, and in the best interests of, BEI Technologies' stockholders.

(ii) resolved to recommend that BEI Technologies' stockholders tender their shares in the tender offer and, if applicable, approve the merger.

In addition, Charles Crocker, the Chairman and CEO of BEI Technologies and its largest stockholder with approximately 19.6% of its outstanding shares, has committed to tender all of his shares to Schneider Electric in the transaction.

The consummation of the transaction is subject to certain conditions, including the tender of a specified number of the shares of BEI, regulatory approvals, and other customary conditions.

The closing of the transaction is expected by the 4th quarter of 2005.

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