London (Reuters) - British engineering software company Aveva is poised to announce a tie-up with France’s Schneider Electric to create a business worth more than 3 billion pounds ($3.9 billion), a source close to the matter told Reuters.
The deal is expected to be confirmed as soon as Tuesday morning and will be structured as a reverse takeover in which Schneider will take a majority stake in Aveva, with shareholders in the British company receiving more than 800 pence per share in cash, the source said.
Schneider's software assets will move to Aveva, which will remain listed on the London Stock Exchange and will retain its Cambridge headquarters, the source added after the deal was first reported by Sky News.(bit.ly/2wz4fKv)
Aveva, founded in 1967 as a spin-off from Cambridge University, provides software for the oil, shipping and power sectors.
The reverse takeover would be Britain’s biggest technology deal this year. However, the deal’s structure means Aveva would avoid the fate of other British technology groups that have been lost to foreign buyers in recent years, such as Softbank’s $32 billion takeover of Cambridge-based chip designer ARM Holdings.
Lazard and Numis are advising Aveva while Morgan Stanley is working with Schneider, the source said.
The combined company will have an enterprise value, which includes debt, of more than 3 billion pounds, the source said.
A spokesman for Schneider declined to comment and Aveva, where James Kidd took over as CEO in January, did not reply immediately to an emailed request for comment.
The companies have twice abandoned previous attempts to agree a deal in 2015 and last year.
The collapse of the first attempt was blamed by Aveva on the “highly complex structure of the proposed transaction” and worries about “significant integration challenges”.
The British company did not give a reason for abandoning the second attempt in June last year. However, a source told Reuters at the time that obstacles included the complexities of merging the two businesses.
The source did not say how previous hurdles had been overcome.
($1 = 0.7738 pounds)
Additional reporting by Parikshit Mishra and Gilles Guillaume; Editing by David Goodman