Itron Inc., the Spokane maker of utility meter-reading technology, is working on licensing to a competitor some of its electric-meter-module and other related technology to satisfy the U.S. government before the companys $255 million acquisition of Schlumberger Electricity Metering can close.


The Spokane company makes clear in its recently filed 10-K annual report that the government wants to ensure there will be competition in the marketplace after Itrons planned purchase of the Oconee, S.C.-based Schlumberger unit.


In the report, Itron says, As an accommodation to concerns raised by the FTC (Federal Trade Commission) regarding competition, we are completing negotiations of an agreement with a competing AMR (automatic meter-reading) vendor to license to them some of our electric-meter-module and certain other related technology. The license with the AMR vendor is contingent on closing the acquisition.


Itron spokeswoman Mima Scarpelli says the company wont disclose the identity of the competing vendor until after the negotiations are complete, but adds, Were hoping to get it done in time to allow us to close the acquisition early in the second quarter.


The acquisition would join one of the countrys leading automatic meter-reading technology companies, Itron, with one of the nations leading makers of meters.


They make meters; Itron does not make meters, she says. Utilities more and more are buying solid state, or electronic, meters rather than mechanical ones, and Schlumberger makes the electronic meters, she says. The acquisition would enable Itron to more readily imbed meters in the radio-based meter modules that it sells as part of its automatic meter-reading systems, Scarpelli says.


The pending acquisition is a huge deal for Itron, Scarpelli says. It doesnt quite double the companys size, but it comes very close.


The governments antitrust concerns have delayed the acquisition already. When Itron announced the acquisition July 17, it initially said it hoped that the transaction would be completed in the third or fourth quarter of 2003. On July 28, it filed with the FTC under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR) notice of its intent to acquire the Schlumberger unit, which is part of Schlumberger Ltd., a Paris-based global oil-field and information-services conglomerate with major involvement in the energy industry.


The Schlumberger unit had revenues of $294 million in 2003; Itron had $319 million in revenues last year.