#UK AVEVA’s £3bn Schneider takeover fails

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AVEVA CEO Richard Longdon

AVEVA’s proposed takeover of French business Schneider Electric, which would have created a Cambridge UK software giant worth £3bn employing 3,500 people worldwide, has collapsed.

The parties said today that they had been unable to reach agreement. AVEVA CEO Richard Longdon had told Business Weekly in July that there was no certainty the complex deal would go ahead.

The challenges flagged up by Longdon (pictured above) became apparent in a lengthy due diligence process and could not be resolved. The news was announced well before the UK stockmarket opened; although AVEVA said it was trading well and full-year results were likely to be as expected, some kind of initial share price backlash looked probable.

Longstanding technology powerhouse AVEVA said today: “Following a period of extensive due diligence the boards of AVEVA and Schneider Electric have been unable to reach agreement and discussions have been terminated by mutual consent.

“The previously announced terms of the transaction were non-binding and as a result no break fees are payable by either party. During the due diligence process significant integration challenges were identified that could not be overcome without considerable additional risk and cost.

“This was exacerbated by the highly complex structure of the proposed transaction. As a result, the board has determined that the anticipated uplift in shareholder value was unlikely to have been realised to the extent previously considered.”

When the acquisition opportunity arose in the summer Longdon, said the deal could turn the Cambridge-based group into a global software giant worth around £3 billion with a headcount of some 3,500 people. It would have been driven from AVEVA’s Cambridge HQ.

He added ominously that it was far from a done deal! Longdon revealed that the due diligence process would be lengthy – and in the meantime there was nothing to prevent a larger, rival offer coming in.

He told Business Weekly recently: “As things stand this is a fantastic deal for AVEVA. It doubles the size of the company overnight. We had discussions with Schneider some time ago but their offer was ridiculous and we invited them to look elsewhere.

“If we pull it off it will be a fantastic deal. I expect it to go through but it is a complicated transaction. Also, it might just pique the interest of other buyers. We are a small fish swimming in a tank of sharks.”
 

from Business Weekly http://ift.tt/1NQEuHQ

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