Software firm Aveva agrees deal with Schneider Electric to create £3bn giant

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

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 by more than a quarter as investors cheered the long-awaited tie-up to form an industrial software giant with combined revenues of around £658m 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.”

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.

A number of UK technology firms have done deals with overseas companies in recent years.

In 2014, Google bought UK artificial intelligence start-up Deep-Mind, while last year ARM Holdings was sold to Japan’s Softbank for £24bn.