06 September, 2017
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.
Through the combination, Schneider and AVEVA will be able to create a larger industrial software provider worth more than £3 billion which could open the opportunity to cut costs as well as find new customers by offering a wider variety of products.
The current deal calls for Schneider, a global industrial giant, to fold its software assets into Aveva's operations and pay the United Kingdom company more than GBP500 million in exchange for a controlling stake in the combined entity, in a so-called reverse takeover, the reports said.
Schneider Electric will provide experience and specialisation in energy management, in addition to the automation solutions it provides. A replacement for AVEVA chief executive James Kidd is being sought and was the appointment is made, it is expected he will be appointed deputy chief executive and chief financial officer.
The tie-up will create a global leader in engineering and industrial software with combined revenue of around 657.5 million pounds ($856.5 million) and adjusted earnings of 145.8 million pounds this year, the companies said.
"They have also got a substantial presence in the USA, which has been one of our key strategic objectives for some time and this gives us a great platform", he said. Aveva will keep the remaining 40%, while its shareholders will receive £550 million from Schneider and £100 million from Aveva.
The deal between Aveva Group and Schneider Electric may be finally here after two false starts, however the CEO of Schneider Electric believes there are now three reasons why investors should be confident about the deal this time around.
Schneider will pay £550m or 858p per Aveva share.
In 2015, months of talks ended with Aveva citing "significant integration challenges... that could not be overcome without considerable additional risk and cost".
Analysts at Jefferies said the rationale looked reasonable, but the details were less convincing for shareholders in the French group.
