Schneider Electric to take over Aveva
Deal structured as reverse takeover, says Aveva CEO
France's Schneider Electric is combining its software operations with Britain's Aveva to create a new, enlarged business, Reuters reported on Monday.
The new entity will be active in sectors ranging from nuclear power to pharmaceuticals and reduce its reliance on the oil and gas sector.
Schneider will pay $858mn towards the issue of new shares in Aveva and will own a 53.5% stake in the software company.
The agreement will see Aveva reduce its dependence on the oil and gas industry, which currently accounts for about 45% of the company’s revenue.
"This deal has a clear and compelling industrial logic," said Aveva's chief executive Richard Longdon, who will remain in charge of the group, Reuters reported.
"[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."
Longdon said Schneider had decided to structure the deal as a reverse takeover rather than the straight acquisition that had been suggested in media reports to retain more flexibility to make further acquisitions, Reuters reported.
"There was not an offer on the table to buy the business outright," he commented.
The deal will more than double the size of Aveva, giving it annual revenue of about $831.9mn and adjusted earnings of about $202.5mn.