AVEVA to merge with Schneider Electric

Schneider Electric SE announced that its board of directors and AVEVA Group plc have reached agreement on the terms and conditions of a combination of AVEVA and Schneider Electric industrial software business (the Schneider Electric Software Business; forming the Enlarged AVEVA Group) to create a global leader in engineering and industrial software.

The combined entity will be a global leader in engineering and industrial software, with scale and relevance in key markets as well as an extensive technology portfolio, with combined revenues and Adjusted EBITA of approximately £657.5 MM and £145.8 MM respectively for the financial year ended March 31. 

The Combination will create an Enlarged AVEVA Group that is well-positioned to take advantage of future M&A opportunities, building on its scale and comprehensive industry and lifecycle solution coverage. On completion, following the issue of ordinary shares in the capital of AVEVA to Schneider Electric, Schneider Electric will own 60% of the Enlarged AVEVA Group on a fully diluted basis while existing AVEVA shareholders and participants in the AVEVA share plans will retain 40% equity ownership (on a fully diluted basis).

Completion, which is expected to be at or around the end of 2017, is subject to the satisfaction of a number of conditions including, amongst other things, applicable regulatory and anti-trust approvals having been obtained, AVEVA shareholder approval of the Combination, and re-admission of the Enlarged AVEVA Group. The parties are in the process of selecting a new Chief Executive Officer of the Enlarged AVEVA Group, with a proven track record and experience in managing a global software business.

The value of the consideration shares to be issued to Schneider Electric is approximately £1.7 B based on the AVEVA Group closing share price at the Latest Practicable Date. Schneider Electric will pay to AVEVA £550 MM in cash, taken together with its contribution of the Schneider Electric Software Business, will mean that Schneider Electric will hold a majority of the Enlarged AVEVA Share Capital. Such cash will be distributed to AVEVA shareholders (excluding Schneider Electric) at or around completion; and AVEVA will also distribute £100 MM in cash to shareholders (excluding Schneider Electric) at or around completion, such amount representing a significant proportion of the excess cash held on AVEVA’s balance sheet after allowing for transaction costs and a prudent view of AVEVA’s working capital requirements.

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