Aveva investors to pocket £550m in Schneider's reverse takeover

Richard Longdon said the deal will ‘diversify Aveva’s end markets’

Shares in the Cambridge-based FTSE 250 technology firm Aveva soared more than 27 per cent yesterday as it announced a reverse takeover by Schneider Electric’s software arm.

The deal brings a £550m cash bonanza to Aveva investors worth 855p a share and comes after months of takeover speculation, in which American firms Emerson and GE were in the frame as potential bidders.

Instead, the French Schneider, which bought Invensys for £3.4bn two years ago, will end up with a controlling 53.5 per cent stake in Aveva, which will retain its London share listing. Richard Longdon, who has been chief executive at Aveva since 1999, will remain in charge of the group. Invensys’s software businesses will return to the UK.

Aveva is a UK technology success story which came out of the so-called “Cambridge phenomenon” in the 1980s when the city and university became a hub for high-tech firms.

It designs software for the oil and gas industry, industrial plants and nuclear powerstations but has been hit by the recent slump in crude prices, which has reduced demand for rigs designed using its software.

“This deal has a clear and compelling industrial logic,” Mr Longdon said.

“[It] will diversify Aveva’s end markets, significantly enhancing its position in oil and gas, power and marine, but also adding a big presence in other verticals including chemicals, food and beverage, mining water and pharmaceuticals,” he added.

Schneider’s injection of cash and assets into Aveva is valued at £1.3bn and it has promised to continue paying dividends at least at the present rate to Aveva shareholders. The combined firm will have revenues of £534 m and earnings of £130m.

Aveva shares rose 484p to 2,256p yesterday.