UK engineering software company Aveva to merge with France's Schneider Electric

UK engineering software company Aveva will merge with the software business of France's Schneider Electric, to create a London-listed firm worth over £3 billion.

Reuters reports that the move marks the third attempt by the two companies to merge and will represent the UK's biggest technology deal this year.

The transaction will see Schneider take a 60 per cent stake in the new group, creating a ''global leader in engineering and industrial software''. The agreement will be structured as a so-called reverse takeover.

Aveva will get around 858 pence per share, or £550 million in cash, from the French company and the tie-up would be completed around the end of 2017. The combined headquarters of the new group will be in Cambridge, where Aveva currently has its headquarters, and the two parties are currently in the process of selecting a new chief executive officer.

Current Aveva chief James Kidd will continue in his role until a replacement is found, at which time he will be appointed deputy CEO and chief financial officer.

"We are delighted to have reached agreement with the Schneider Electric software business,'' said Philip Aiken, chairman of Aveva, The Independent reported.

Cambridge-based Aveva, meanwhile, will pay a further £100 million or 156p per share to shareholders on completion of the deal and the  combined company will retain Aveva's UK listing.

Aveva a supplier of software to the oil and gas industry, has taken a hit due to low commodity prices in recent years.

According to Aveva chairman Philip Aiken the deal, which provides the company with greater exposure to North America, will create a ''global leader in industrial software''.  

He said: ''Aveva will significantly expand its scale and product portfolio, increase its capabilities in the owner operator market, diversify its end user markets and increase its geographic exposure to the North American market, in line with our strategic goals,'' The Telegraph reported.