Schneider Electric agrees £9.5bn buyout of UK software developer Aveva

French industrial conglomerate Schneider Electric has agreed to buy the rest of Aveva, in a deal that values the UK software developer’s equity at nearly £9.5bn and strips the London market of one of its few remaining large tech groups.

The French group is buying the 40 per cent of Aveva it does not already own for £31 a share, it said in a statement on Wednesday. The deal is one of the bigger acquisitions in the UK this year.

The offer marks a premium of about 40 per cent from before Schneider confirmed it was exploring a potential buyout in late August. Shares in Cambridge-based Aveva closed up at £30.38 on Tuesday.

Aveva, which was spun out of Cambridge university in the 1960s, is one of Britain’s oldest technology companies. Its software has focused primarily on the energy, infrastructure and manufacturing sectors — areas Schneider Electric covers as well — although it has also expanded into other industries.

The French group said the deal would allow a “faster execution of Schneider Electric’s software growth strategy”. Aveva will retain its Cambridge headquarters and an autonomous team, it added.

Schneider’s chair and chief executive Jean-Pascal Tricoire told a conference call that the company wanted to “accelerate the path to deliver to our customers one data hub”. Schneider provides automation and software services, including systems to help companies improve energy efficiency in buildings and factories.

“Energy is at the top of the agenda for all our industrial customers,” Tricoire said.

Schneider also wants to help Aveva move to a subscription-based model and co-operate in areas such as research and development, Tricoire said.

Before the news of Schneider’s potential bid, Aveva had issued a profit warning in which it flagged inflationary pressures and said growth would slow in 2022.

The British group sought to diversify away from its core customer base in oil and gas with the $5bn acquisition of US rival OSIsoft last year.

Schneider has owned 60 per cent of Aveva since a 2017 agreement and a £3bn reverse takeover in which the French group folded its software assets into the UK company, which retained a London listing.

Schneider’s own market value has grown sharply in the past four years as more of its clients looked to save energy and use its services in areas such as data centres, though its shares have dropped more than 30 per cent this year. The group let go of its Russian business in July by selling it to local management, joining a wave of foreign companies to leave after the invasion of Ukraine.