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France’s Schneider considers full buyout of AVEVA

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PARIS — French industrial conglomerate Schneider said on Wednesday it was considering buying out minority shareholders in software company AVEVA, sending the British company’s shares more than 32% up.

Schneider, which already owns nearly 60% of AVEVA, said it would decide by 1600 GMT on Sept. 21 whether to go ahead with a bid.

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“No proposal has been made to AVEVA yet and there can be no certainty that any offer will be made, nor as to the terms on which any offer will be made (should one be made),” it said in a statement.

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AVEVA declined to comment.

The jump in its shares gave the British company a market capitalisation of around 8.6 billion pounds ($10.1 billion), while Schneider’s shares rose by 0.6%.

Schneider took majority control of AVEVA in 2017 in its third attempt since 2015 in a reverse takeover that enabled the British company to retain its London listing. It paid 3 billion pounds at that time.

AVEVA’s share price has doubled since then, which could result in the French company paying a bigger price for the remaining shares.

However, even after the jump in shares following the buyout report, they were still below the over 4,000 pence price reached during the height of the COVID-19 pandemic.

“At the time of the acquisition, Schneider didn’t want to disrupt the culture of AVEVA, enabling the company to carry on with some independence, while still taking advantage of overlap in customer end markets,” Morningstar analyst Denise Molina said.

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“Fast forward to now AVEVA is now more integrated with a few years of working with Schneider’s software business and the current CEO, Peter Herweck, comes from Schneider. So the risk of disruption through full ownership is not as much of an issue.”

AVEVA’s products are used to design and manage oil rigs, ships and chemical plants, while the French multinational spans electrical components, energy management and industrial automation systems.

“Schneider Electric believes that a full combination of AVEVA and the software business of Schneider Electric will reinforce AVEVA, and enable it to execute its growth strategy faster,” Schneider said.

“Whether or not an offer is made, Schneider Electric remains committed to AVEVA, to its agnostic and autonomous business model and to its employees.”

($1 = 0.8488 pounds) (Reporting by Sudip Kar-Gupta, Paul Sandle and Julien Ponthus; Writing by Sudip Kar-Gupta and Ingrid Melander; Editing by Jason Neely, Edmund Blair and Emelia Sithole-Matarise)

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