Schneider Electric, a French industrial conglomerate, announced the acquisition of British software developer Aveva, proposing £31 per share in a deal valued at £9.48 billion (nearly $11 billion).
Schneider Electric said its offer represents a 41 precent premium on Aveva’s share price of £21.92 at the time of the announcement. Aveva’s shares jumped 2.2 percent while Schneider Electric’s shares fell by 1 percent in early London trading. Schneider Electric stated that any interim dividend of up to 13 pence would be paid to Aveva’s shareholders in full.
Schneider Electric already owns roughly 60 percent of Aveva. In 2017, it gained majority ownership in a reverse acquisition that allowed the British firm to keep its London listing. At the time, Schneider Electric paid £3 billion.
Aveva’s software will remain agnostic, meaning it will function with or without Schneider Electric’s hardware. According to the organizations, the company will remain independent, as made evident by the decision not to incorporate its employees into Schneider Electric’s teams.
Aveva’s unique culture as a software firm would be preserved, according to the French company. Its products are used to build and run oil rigs, ships and chemical plants, while Schneider Electric’s portfolio includes electronic, energy management and industrial automation systems.
On the expensive side
Analysts at Jefferies and Credit Suisse questioned the strategy to keep the business agnostic and autonomous. While Jefferies can see the logic in speeding up software-as-a-service and reducing costs, it thinks that the valuation may be on the expensive side, and would like an explanation as to why Schneider Electric isn’t pursuing deeper hardware integrations.