Aveva and Schneider call off merger

LONDON: Britain's Aveva, a maker of programmes to design oil rigs, ships and nuclear power stations, and Schneider Electric have scrapped a tie-up, saying combining the software businesses would be too risky and costly.

The pair agreed a deal in July that would have seen France's Schneider pay 550 million pounds towards the issue of new shares in Aveva to take a 53.5 percent stake in a company comprising the British firm with Schneider's software operations.

The tie-up would have reduced Aveva's exposure to oil and gas markets, the source of about 45 percent of its revenue, where lower oil prices have cut demand for rigs designed by its software.

Aveva said on Tuesday both companies had agreed to terminate the deal.

"During the due diligence process significant integration challenges were identified that could not be overcome without considerable additional risk and cost," Aveva said in a statement.

"This was exacerbated by the highly complex structure of the proposed transaction."

Under the agreed terms, Aveva's shareholders would have received about 10 pounds a share in cash, brokers said in July, which combined with a 15 percent profit boost from cost savings valued the deal at 2,600 pence a share, a 47 percent premium.

Shares in Aveva, which was founded in 1967 as a spin-off from Cambridge University, jumped to a four-year high when the deal was announced, and hit a fresh peak of 2,350 pence earlier this month.

Aveva said no break fees were payable by either party, adding that its expectations for the full-year remained the same.