News of an agreed reverse takeover of Aveva (AVV) by Schneider Electric sent shares in the ailing engineering software group up 27 per cent. Aveva plans to acquire the French energy giant's software business, while Schneider will take a 53.5 per cent stake in the enlarged business. Aveva will also receive a £550m cash payment - equivalent to 855p a share - which it plans to return to its other investors.
The tie-up promises to create a global leader in industrial software with sales and adjusted cash profits of around £534m and £130m, respectively. It would also strengthen Aveva's product portfolio by combining its 3D design and simulation software with Schneider's real-time operational, asset and information management applications. And it would extend Aveva's presence in markets such as mining, water and chemicals, and boost its exposure to the lucrative American market.
Both parties could use a jolt of growth: Aveva continues to battle currency headwinds and weak oil and gas spending, while Schneider Software's full-year, adjusted cash profits fell 7 per cent due to rising costs and falling sales of engineering services and software licences.
