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  1. Hardware
July 20, 2015

Aveva seeks mass expansion in £1.3bn Schneider Electric buyout

Enlarged software firm will retain leadership and be protected from further stock purchase.

By Jimmy Nicholls

Schneider Electric will buy a majority stake in the software firm Aveva, in the latest of several billion-pound deals putting British tech firms under the control of foreign corporations.

Under the complex deal Aveva will acquire Schneider Software, an industrial software unit, on a debt-free, cash-free basis, with Schneider then offering Aveva £550m for 74 million shares that will leave it with a majority stake in the company.

Based on current share values of 1,772p the deal will thus be worth £1.3bn, with the relative sizes of both Aveva and Schneider Software meaning it will be classified as a "reverse takeover", according to Aveva.

Richard Longdon, chief executive at Aveva, presented the move as a chance to create "a global leader in industrial software", the enlarged Aveva having revenues of £534m and earnings before interests, tax and amortization (Ebita) of £130m.

He added that the move will allow Aveva to increase its footprint across more of the engineering process, expand further into the Americas and better target vertical markets.

Jean-Pascal Tricoire, chair and chief executive at Schneider, said the deal would "create the right environment for the software teams to develop aggressively their business, while benefitting from multiple commercial access of Schneider around the world.

"We believe that through increased scale, complementary footprint and joint R&D capabilities the transaction will generate synergies that will benefit customers and shareholders alike."

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Though Schneider will own some 53.5% of the enlarged Aveva, the company will remain listed on the London Stock Exchange and leadership at the firm will remain unchanged after the deal is complete.

For two years after the purchase Schneider has agreed not to increase its stake in the firm, and further restrictions will apply for 18 months beyond that.

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