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MPs tell Grant Shapps to block Aveva deal

MPs tell Grant Shapps to block Aveva deal

As French raider wins vote for UK tech champion… MPs call on Grant Shapps to block Aveva deal

  • Shapps under pressure to intervene in controversial Schneider Electric takeover
  • Schneider has won the deciding vote on its £10bn takeover of the Cambridge-based company
  • Deal takes Aveva off the London Stock Exchange, hitting 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 close vote yesterday on its £10bn takeover of the Cambridge-based company, overcoming opposition from major shareholders.

It was rejected by 16.5% of independent Aveva investors, but passed the 75% threshold required to be approved.

Schneider will now buy the 41% of the company he does not already own, for 3225p per share.

The deal takes Aveva off the London Stock Exchange (LSE) and is a blow to the UK’s credibility as a hub for innovative tech companies.

But the takeover has raised concerns in political circles, with senior MPs urging Business Secretary Shapps to intervene over the French company’s ties to China.

Schneider has had a joint venture with Chinese conglomerate Delixi Electric since 2007, raising concerns among critics that Aveva’s proprietary technology is at risk of falling into Chinese hands.

Former Tory leader Sir Iain Duncan Smith has called for a review of the joint venture deal under the National Security and Investment Act.

He said: “Wherever there is Chinese involvement, the government should conduct a review.

“As China is increasingly a threat, we need to look into anything that appears to be Chinese involvement.”

Russ Shaw, founder of Tech London Advocates, echoed those concerns and said every overseas takeover of a UK company “needs an assessment”.

He added, “From a national security and investment perspective, I think every overseas transaction has to meet certain criteria.”

“There should definitely be an assessment, although given their background I think it would be very simple.”

The calls for a review come just a week after Shapps dramatically blocked China’s takeover of Britain’s biggest microchip maker, Newport Wafer Fab, over security concerns.

The government has used its powers under the National Security and Investment Act to order Nexperia to cut its stake in Britain’s biggest microchip maker by 86%.

Schneider will now notify the government of the takeover, as company figures believe it falls within the scope of the law.

He will also face a final court hearing in the early months of next year, after which the deal is expected to be completed.

Conservative MP Tobias Ellwood, chairman of Parliament’s Defense Committee, said: ‘Aveva is clearly a British success story in an industry of the future.

“I would expect the government to examine 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 it should be used as such.”

Originating from the University of Cambridge in the 1960s, Aveva provides software that helps engineers design large industrial projects, as well as products that help keep factories running.

Chancellor of the Exchequer Jeremy Hunt has promised to make the UK the “world’s next Silicon Valley” by combining the country’s scientific and technological prowess with its “tremendous financial services”.

But London is struggling to attract major tech companies despite repeated efforts by Conservative governments over the past decade.

It suffered a major blow earlier this year when chipmaker Arm snubbed the capital in favor of a New York listing.

Shaw added that “it’s a shame” to lose Aveva from the London stock market because it is an “important company”.

This marks the departure of one of the LSE’s few remaining tech companies and leaves Darktrace and Sage as the only remaining major players.

Virus protection company Avast exited this year after a £7bn merger with Nortonlifelock.

Micro Focus International is acquired by Canadian software company Open Text.

Aveva said it was “happy” the deal was approved.

Schneider’s offer represented a 41% premium to Aveva’s share price on August 23, when news of a possible offer first broke.

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