Aveva, the FTSE 250 engineering software group, has agreed a £3bn-plus merger with the software arm of France’s Schneider Electric.
The tie-up creates one of the UK’s biggest listed software companies with combined revenues of around £658m and earnings of some £146m.
The deal – revealed by Sky News earlier this week – will effectively constitute a reverse takeover of Aveva with Schneider folding its software business into its British peer’s operations in return for a majority 60% stake in the enlarged group.
Aveva’s shareholders will receive £550m – around 858p-per-share in cash – as part of the deal from Schneider, plus an additional £100m worth around 156p-per-share, from cash on Aveva’s balance sheet.
Aveva, which makes specialist software for complex processes in the oil and gas industries, will remain headquartered in Cambridge and listed on the London Stock Exchange.
The deal, which is expected to be completed by the end of the year, comes after two previous failed attempts at a tie-up.
In 2015, months of talks ended with Aveva citing “significant integration challenges… that could not be overcome without considerable additional risk and cost”.
A resuscitated attempt to strike a deal last year was aborted just three days after confirmation that they were back in discussions.
Aveva has 1,700 staff working across 30 countries with a customer base of more than 4,000, while Schneider employs around 2,700 people in its operations spanning North America, Europe, the Middle East, Asia Pacific and Latin America.
Chief executive James Kidd said the deal would give Aveva a bigger presence in sectors such as food and beverages and pharmaceuticals, and it would benefit from Schneider’s bigger position in North America.
Source: Sky News