French power equipment specialist Schneider Electric has signed an agreement to acquire Spanish software firm Telvent GIT for €1.4bn ($2bn), the company said on Wednesday.

Schneider, the world’s largest producer of low and medium voltage equipment, hopes to reinforce its solution capability for the smart grid electricity software according to a company statement.

Telvent’s shareholders will receive $40 a share under the terms of the offer, which is 16 percent higher than the company’s closing price on Tuesday. The tender offer is expected to start mid-June and close in Q3.

Schneider’s president and CEO, Jean-Pascal Tricoire, said: “The acquisition is in line with our ambition to become a complete solution provider for our customers. Telvent offers software capability that complements and integrates with Schneider Electric’s offering.  It also brings complementary customer base and geographical coverage.”