As French raider wins vote for UK tech champion… MPs tell Grant Shapps to block Aveva deal
- Shapps under pressure to intervene in controversial Schneider Electric takeover
- Schneider won a decisive vote on the £10bn purchase of the Cambridge-based company
- Deal takes Aveva off the London Stock Exchange in a blow to UK credibility
Grant Shapps is under intense pressure to intervene in Schneider Electric’s controversial takeover of British tech champion Aveva as security concerns mount.
French company Schneider won a decisive vote yesterday to buy the Cambridge-based company for £10bn, overcoming opposition from major shareholders.
It was rejected by 16.5 percent of independent investors in Aveva, but it passed the 75 percent threshold needed for approval.
Schneider will now acquire the 41 per cent of the company that he does not already own, for 3,225 pence per share.
The deal takes Aveva off the London Stock Exchange (LSE) in a blow to the UK’s credibility as a hub for innovative technology companies.
But the takeover has caused concern in political circles with high-profile lawmakers urging business secretary Shapps to weigh in on the French company’s ties to China.
Schneider has had a joint venture with Chinese conglomerate Delixi Electric since 2007, raising fears among critics that Aveva’s proprietary technology risks falling into Chinese hands.
Former Conservative leader Sir Iain Duncan Smith called for a review of the joint venture agreement under the National Security and Investment Act.
He said: ‘Wherever there is Chinese involvement, the government must conduct a review.
“As China is increasingly a threat, we must review anything that appears to be Chinese involvement.”
Russ Shaw, founder of Tech London Advocates, echoed those concerns, saying that every foreign takeover of a UK company “needs some assessment”.
He added: ‘From a national security and investment standpoint, I believe there are certain criteria that every foreign transaction must meet.
“There definitely should be an evaluation, although given his track record I suspect it would be very straightforward.”
The review requests come just a week after Shapps spectacularly blocked a Chinese takeover of Britain’s biggest microchip maker, Newport Wafer Fab, on security grounds.
The government used its powers under the Investment and National Security Act to order Nexperia to reduce its stake in Britain’s biggest microchip maker by 86 percent.
Schneider will now notify the Government of the acquisition as company figures believe it falls within the scope of the Act.
It will also face a final court hearing in the early months of next year, after which the deal is expected to be finalized.
Conservative MP Tobias Ellwood, chairman of Parliament’s defense committee, said: ‘Aveva is clearly a UK success story in an industry of the future.
‘I expect the government to look at this transaction very closely to assess the implications for national security.
“The National Security and Investment Act entered the statute book for a purpose and should be used as such.”
Growing out of Cambridge University in the 1960s, Aveva offers software that helps engineers design large industrial projects, as well as products that help run factories.
Chancellor of the Exchequer Jeremy Hunt has vowed to make the UK the “world’s next Silicon Valley” by combining the country’s scientific and technological prowess with its “formidable financial services”.
But London has struggled to attract leading tech firms despite repeated efforts by Conservative governments over the past decade.
It took a hit earlier this year when chipmaker Arm turned down capital in favor of a New York listing.
Shaw added that “it’s a shame” to lose Aveva from the London stock market as it is an “important company”.
It marks the departure of one of the few remaining tech companies on the LSE and leaves Darktrace and Sage as the only major players left.
Virus protection firm Avast left this year after a £7bn merger with Nortonlifelock.
Micro Focus International is being bought by Canadian software firm Open Text.
Aveva said it was “pleased” the deal had been approved.
Schneider’s offer was at a 41 percent premium to Aveva’s share price on August 23, when news of a possible offer was first reported.