AVEVA stock soars 33%: Schneider Electric interested in AVEVA takeover

shares in this article

According to a statement on Wednesday, the French electronics company Schneider Electric, which already holds 60 percent of the British company, is considering a bid to acquire the remaining shares. But there is no decision yet. The Bloomberg news agency had previously reported on such considerations.

The sharp drop in the share price makes the long-considered step more attractive, according to Bloomberg. Before the price jump on Wednesday, AVEVA was worth around 7.3 billion British pounds (8.7 billion euros) on the stock exchange.

Schneider CEO Jean-Pascal Tricoire recently pushed ahead with the separation of peripheral areas and directs more investments into areas that the company is facing during the transition digitalization help. The Cambridge-based company AVEVA offers software for utilities, oil and gas producers, transport companies and other companies and also competes with the German technology group Siemens, among others.

Schneider took control of AVEVA after the French merged their own industrial software business with the British company in 2017. Since then, AVEVA has grown through acquisitions.

AVEVA’s original agreement with Schneider barred the French company from increasing its stake in AVEVA for two years and capped its stake below 75 percent for a further 18 months if certain conditions were not met.

How are stocks reacting?

Driven by speculation about takeovers, AVEVA shares soared to 33.17 percent in London on Wednesday afternoon. The French electrical engineering group Schneider Electric is considering a complete takeover of the software provider, in which it already holds around 60 percent, as the Bloomberg news agency wrote, citing people familiar with the matter. Schneider shares were recently up 0.73 percent. AVEVA has come under significant pressure on the stock market in recent months, which makes a purchase more attractive.

Jefferies leaves Schneider Electric on hold – target 120 euros

The analyst firm Jefferies has put Schneider Electric on hold with a price target of EUR 120 in view of a possible complete takeover of the software provider Aveva. Analyst Simon Toennessen considers the transaction to be sensible in view of the 50 percent drop in the price of Aveva shares over the past twelve months, especially since most of Aveva’s top managers have come from Schneider. He wrote this in a study available on Wednesday.

LONDON / NEW YORK (dpa-AFX Broker)

Image sources: MIGUEL MEDINA/AFP/Getty Images, IgorGolovniov / Shutterstock.com