Schneider Electric Takes Control of U.K. Software Firm Aveva -- Update
05 Settembre 2017 - 12:47PM
Dow Jones News
By Ben Dummett and Nick Kostov
France's Schneider Electric SE has agreed to take control of
British engineering software provider Aveva Group PLC, the latest
move by an industrial giant toward writing the software that will
run the factories and machines of the future.
Under the deal, announced in a joint statement Tuesday,
Schneider will fold its software assets into Aveva's operations and
pay the U.K. company more than GBP550 million ($710.4 million) in
exchange for a 60% stake in the combined entity, in a so-called
reverse takeover. Aveva would also distribute GBP100 million to
shareholders following the deal's completion.
The companies are combining to add heft as industrial giants
like Siemens AG bulk up in software as manufacturing adopts more
automation. Other companies including General Electric Co. and
Robert Bosch GmbH have been working on digitizing their own
manufacturing processes, and developing software platforms and
automation tools to sell to other industrial players.
Also fearing disruption from Silicon Valley giants and tech
startups, Schneider has already targeted U.K. software companies in
the past to bolster its industrial software business. In 2013, it
agreed to acquire Invensys PLC for GBP3.31 billion to better
compete against rivals such as Siemens AG, Mitsubishi Electric
Corp. and Rockwell Automation Inc. The combination would offer it
opportunities to cut costs and access new customers.
"Through increased scale and complementary footprint the
transaction will generate synergies that will benefit customers and
shareholders alike," said Jean-Pascal Tricoire, Schneider's chief
executive.
The planned transaction is similar to the structure of the
companies' previous attempt to merge their industrial software
businesses in July 2015. Then, Schneider had agreed to combine its
software assets with those of Aveva and pay GBP550 million in
exchange for a 53.5% stake in the enlarged group. However, the deal
collapsed after the two sides couldn't agree on final terms.
Spun out of Cambridge University in 1967, Aveva provides
engineering software to owners, operators and engineering
contractors that operate in the power, oil-and-gas, marine and
paper and pulp sectors, among others. It employs more than 1,700
people across 30 countries. Its other main markets include power,
petrochemical and chemicals.
The deal comes at a time when Aveva is trying to reduce it
reliance on the slowing oil-and-gas and marine markets. For the
year ended March 31, Aveva boosted revenue by 7% to GBP215.8
million from the prior year, benefiting in part from currency
moves. Discounting that, revenue was down 3.8%.
Schneider's software is used to help manage manufacturing
processes, design tools and train plant crews. It services an array
of industries ranging from transportation to its largest market of
food and beverages and pharmaceuticals, which generated about 16%
of the company's annual software revenue.
The combination will also give Aveva greater access to the U.S.
market, where Schneider's software business generates almost half
of its annual sales. Aveva generates the bulk of its revenue in
Europe, the Middle East and Asia.
"Aveva will significantly expand its scale and product
portfolio, increase its capabilities in the owner operator market,
diversify its end user markets and increase its geographic exposure
to the North American market," said Aveva Chairman Philip
Aiken.
Aveva would maintain its listing on the London Stock Exchange
and remain headquartered in Cambridge, U.K.
Write to Ben Dummett at ben.dummett@wsj.com and Nick Kostov at
Nick.Kostov@wsj.com
(END) Dow Jones Newswires
September 05, 2017 06:32 ET (10:32 GMT)
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