UK software company Aveva announces deal with Schneider Electric to create £3bn company

It marks the third attempt by the two companies to complete a tie-up, and will represent Britain’s biggest technology deal this year

Schneider operates in over 100 countries (Thomson Reuters)

UK engineering software company Aveva has agreed to merge with the software business of France’s Schneider Electric – a deal that will create a London-listed firm worth over £3bn.

It marks the third attempt by the two companies to complete a tie-up, and will represent Britain’s biggest technology deal this year, according to Reuters.

Under the terms of the transaction, Schneider will take a 60 per cent stake in the new group, creating a “global leader in engineering and industrial software”. As such, the agreement will be structured as a so-called reverse takeover.

The French company will pay Aveva around 858 pence per share, or £550m in cash, and the tie-up is expected to be completed around the end of 2017. The new group’s combined headquarters will be in Cambridge, where Aveva’s currently are, and the two parties are currently in the process of selecting a new chief executive officer.

James Kidd, the current CEO of Aveva, will remain in his role until a replacement is found, at which time he will be appointed deputy CEO and chief financial officer.

"We are delighted to have reached agreement […] with the Schneider Electric software business,” said Philip Aiken, chairman of Aveva

“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. 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,” he said.

Jean-Pascal Tricoire, chairman and CEO of Schneider Electric said: “We believe that through increased scale and complementary footprint, the transaction will generate synergies that will benefit customers and shareholders alike."

Aveva was founded in 1967 as a spin-off from Cambridge University. It provides software for the oil, shipping and power sectors. Schneider is a multinational company, operational in over 100 countries.