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Schneider to Join Its Software Assets with Aveva

In a reverse takeover of the British engineering software company, Schneider Electric will regroup the industrial software assets that made up much of its Invensys acquisition two years ago into a larger industry proposition.

Aveva Everything3D plant design software is part of the expanded portfolio of the Enlarged Aveva Group, along with other Aveva and Schneider Electric offerings.
Aveva Everything3D plant design software is part of the expanded portfolio of the Enlarged Aveva Group, along with other Aveva and Schneider Electric offerings.

If there’s a time to be less reliant on the oil and gas sector, now is probably it. That could well be what British engineering software company Aveva is thinking as it embarks on its acquisition of select industrial software assets from France’s Schneider Electric, which will give it more access to other industrial sectors like pharmaceuticals, food and beverage, mining, water/wastewater and chemicals. The oil and gas industry currently accounts for about 45 percent of Aveva’s revenue. The agreement would also give Aveva considerably more access to the American market.

What Schneider Electric is thinking, however, has been a subject of considerable speculation. The industrial software assets that are on the table in this deal include, among others, the Invensys software assets that Schneider bought in 2013. So what does it mean that Schneider seems to be selling that software business off? That the Schneider/Invensys acquisition that seemed to be going well is actually going south? No, I don’t think so.

Such speculation is premature and merely sensational. It’s also important to really look at the new deal with Aveva. Although Aveva is reportedly acquiring Schneider Software, Schneider is also paying £550 million (about $860 million) for new Aveva shares. This will give Schneider Electric 53.5 percent ownership of what will now be known as the Enlarged Aveva Group. The transaction is actually classified as a reverse takeover of Aveva.

Combining Aveva with software assets of Schneider Electric seems to make sense. When Schneider announced its acquisition of Invensys two years ago, it pointed in particular to the benefits of acquiring an industrial automation player with a strong software presence. Indeed, software has become a vital component of the automation landscape. And combining those assets with Aveva’s only makes Schneider’s software proposition that much stronger.

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