Toshiba acquires Landis+Gyr, takes smart grid poll position

Japanese electronics giant Toshiba will acquire prominent smart metering firm Landis+Gyr for $2.3 billion.

Japanese electronics giant Toshiba on Thursday announced that it would acquire prominent smart metering firm Landis+Gyr for $2.3 billion.

The deal instantly gives Toshiba a trusted name in the smart grid space, and gives century-old Landis+Gyr tremendous global reach for its 8,000 utility customers in 30 countries. Toshiba corporate EVP Hideo Kitamura said in a statement that the deal would help Toshiba become a "global leader in the smart community business by 2020."

That word, "community," is important here. For Toshiba, it's not about getting into infrastructure for the sake of it; rather, it's to build a stack for its many connected technologies, allowing smart meters -- electronics themselves -- to better function with its many other products.

That's why Toshiba is preserving the Landis+Gyr brand, as well as its employees. The tech giant wants the benefit of internal knowledge to take advantage of growth in the energy sector, but is avoiding mixing two well-known brands together.

Pike Research's Bob Gohn gets it:

Why is globalization so important for smart meter makers? It comes down to the numbers. Unlike other high-growth high-tech items such as cell phone and PCs, the ultimate installed base of electric meters is relatively static – no need for multiple meters per household or per person. And even if smart meter lifecycles end up being shorter than the simple meters they replace, they are still far longer than other high-tech devices. So the current out-of-cycle upgrades to the electric meter installed base that is driving growth within each region will ultimately be followed by a valley where meter sales may be below the traditional once-every-twenty-years replacement rate.

The deal is expected to close in Q3 2011.

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