Aveva the British engineering software provider to the plant, power and marine industries is set to merge with Schneider Electric, the French multinational corporation that specializes in energy management and automation solutions.
Schneider has tried to link with Aveva its software business on 2 previous occasions December 2015 – which failed due to integration challenges and June 2016 – which also failed after just two days.
This deal is said to be ongoing as it is being pushed to be approved by Aveva’s shareholders and it is estimated to rake in about £500m as compensation to be paid by Schneider to contribute its own Software division, hence taking control of the company. This is to become one of the UK’s greatest listed software companies.
Aveva Under Distress
Aveva supplies software to the oil and gas plants, power and marine industries but in recent times, the business is said to have come under stress due to low commodity prices. A merger will reduce the amount of money spent considerably hence a plus for the company, the hard part however will involve making the decision to give up full ownership.
How this merger intends to operate is Schneider becomes the majority stakeholder in this new group while the shareholders of Aveva get more than 800p per share in cash. This merger will not change the company’s location or it’s listing on the London stock Exchange.
While the closing price of the British software company is pegged at 1918p with a market value of £1.24bn, the French company gets a large market worthing almost €41bn.