French electrical equipment and automation company Schneider Electric is buying Bulgarian tech firm Shelly Group for 1.2 billion euros in cash, the company said today.

Schneider Electric confirmed it will make a voluntary bid for Shelly Group, but the deal still needs approval from Bulgaria's regulator. It is expected to close by the end of the first quarter of 2027.

Under the terms of the offer, the French firm will pay 70 euros a share for all the stock in Shelly Group it does not already own. For the deal to go through, at least 95% of the Bulgarian company's shareholders must accept it. If that threshold is reached, Schneider Electric will be able to buy out the remaining shares and take full control of the company, it said.

Shelly Group and its two founders, Dimitar Dimitrov and Svetlin Todorov, who together hold about 57% of the company, welcomed the deal. Both have already agreed to sell their shares under certain conditions.

Dimitrov, who owns about 29% of the company, is expected to accept the offer for his shares and reinvest part of the money alongside Schneider Electric for at least three more years.

Schneider Electric has also agreed to buy about 28% of the company from Todorov, a stake he holds both personally and through his own firm, Salisto Holdings.

The tender offer will be filed with Bulgaria's Financial Supervision Commission, Schneider Electric said. The commission must review and approve the paperwork. Once it does, the full terms of the offer will be made public, as required by law, and the clock will start running on the period during which shareholders can accept it.

With the deal, Schneider Electric will combine Shelly Group's home energy management software with its own technology for homes, building renovations and small businesses.

The Bulgarian News Agency BTA notes that in late July, Shelly Group said it was in early talks with Schneider Electric SE over a possible tender offer for the Bulgarian company's shares.