Engineering software firm Aveva ties knot with France’s Schneider Electric

● Aveva will keep its HQ in Cambridge and remain listed on London exchange

Engineering software firm Aveva has confirmed a merger with the software arm of France’s Schneider Electric to create a group worth more than £3 billion.

The deal, which comes after two failed merger attempts in the past two years, will see Schneider take a 60 per cent stake in the combined firm and Aveva’s shareholders own the remaining 40 per cent.

Shares in Aveva soared as investors cheered the longawaited tie-up to form an industrial software giant with combined revenues of around £658 million and earnings of some £146m.

The merger will be structured as a so-called reverse takeover, with Schneider folding its software business into Aveva’s operations and paying £550m in cash, worth around 858p a share.

Aveva will pay a further £100m or 156p a share to its shareholders once the deal is completed. But Aveva will keep its headquarters in Cambridge and remain listed on the London Stock Exchange.

Philip Aiken, chairman of Aveva, said: “The transaction will be transformational to Aveva, creating a global leader in industrial software, which will be able to better compete on a global scale.”

He added: “Aveva will significantly expand its scale and product portfolio, increase its capabilities in the owner operator market, diversify its end user markets and increase its geographic exposure to the North American market, in line with our strategic goals.”

It comes after the pair first began merger talks in July 2015, but those discussions broke down after Schneider was unable to separate its software assets, while a further attempt a year later also collapsed.

Aveva was founded 50 years ago after being spun out of Cambridge University. It provides engineering software to owners, operators and engineering contractors across the power, oil and gas, marine and paper and pulp sectors.

The group employs more than 1,700 people across 30 countries and has a customer base of more than 4,000.

Schneider’s software arm has a global footprint spanning North America, Europe, the Middle East, Asia Pacific and Latin America and has some 2,700 employees worldwide. It has previously targeted UK software companies, having swooped on industrial software firm Invensys for £3.4bn in 2013.

The Aveva deal is expected to complete around the end of the year. It comes just over a month after Schneider agreed to buy US firm Asco Power Technologies for $1.25bn (£970m), in an all-cash deal.