Schneider Electric weighs deal for software maker Bentley Systems

A purchase of Bentley would be Schneider’s first big strategic move under new chief executive Peter Herweck. Photo / Bloomberg via Getty Images

French software and automation company Schneider Electric said it was in talks over a potential deal with Bentley Systems, a US software specialist with a market value of about US$15.6 billion ($24.4b).

In 2021, Nasdaq-listed Bentley Systems bought Christchurch-based Seequent, a maker of geologic-modelling software, for US$1.05b (then $1.45b) in one of NZ’s biggest tech deals. In June, Seequent’s Liz Crawshaw told the Herald its US owner had left it to its own devices. Staff numbers had grown from 430 to 700.

In 2018, Schneider shut a manufacturing plant in Christchurch, with 50 roles moved to operations in Adelaide and Vietnam.

The French firm said on Friday it had “been holding discussions with Bentley Systems with regards to a potential strategic transaction”, and that talks were still preliminary. The statement followed reports that the French group was in talks to take control of Bentley, which makes software used in the engineering of infrastructure projects.

A purchase of Pennsylvania-based Bentley, which is controlled by members of the Bentley family, would be Schneider’s first big strategic move under chief executive Peter Herweck, who succeeded Jean-Pascal Tricoire last year. It would be the biggest acquisition by the French company, which was founded in the 19th century as an iron foundry.

“It is a surprise to us that Schneider is exploring an acquisition of this scale ... given it appears to be at odds with the messaging of “evolution not revolution” since the CEO transition,” Berenberg analyst Philip Buller said in a note.

Buller said while the size could make the acquisition a bad idea, Schneider had a good record in its approach to deals.

“Many deals in recent years have made us wince upon announcement, but have ultimately proven well timed, were well structured and have ultimately put the company in an advantageous position,” he said.

Shares in the Paris-listed group were down 2.25 per cent to €210.5 on Friday, giving the company a market value of €120.5b. They remain up more than 18 per cent this year. Bentley shares rose 5 per cent in New York after reports of talks emerged.

With annual revenues of €36b last year and a big presence in China, Schneider — a specialist in automation and software that helps manage energy efficiency in buildings and data centres — has capitalised on a drive by companies and governments to limit their energy consumption.

The French group has grown through acquisitions over the years, including the two-stage acquisition of British technology company Aveva, sealed in 2022 and which valued the UK company at £10.6b.

The Wall Street Journal first reported that Schneider was in talks with Bentley for a deal that would combine their software businesses, but would keep them listed. Reuters had earlier reported Bentley was interested in exploring a sale and that other bidders could be looking at the group.

Bentley has a close relationship with German group Siemens, which in 2020 was reportedly contemplating an acquisition. Both groups struck a strategic alliance in 2016 and have added to it since by funding a joint innovation programme.

Siemens, which declined to comment on Friday, had bought shares in Bentley.

Written by: Sarah White in Paris. Additional reporting by Arjun Neil Alim in Frankfurt. With reporting by Herald staff.

© Financial Times