Clear the Lobby: What Laws are MPs voting on this week? W/C 24th October 2022
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HXA V SURREY COUNTY COUNCIL AND YXA V WOLVERHAMPTON CITY COUNCIL – AN ALTERNATION IN THE AREA OF RESPONSIBILITY FOR FAILURE OF PUBLIC AUTHORITIES TO PROTECT CHILDREN FROM ABUSE
October 24, 2022
Article by Zahra Rahman
An agreed takeover of AVEVA Group plc by the France-based Schneider Electric signals a disappointing start of events for former chancellor Kwasi Kwarteng’s expectations of a ‘Big Bang 2.0’ boost in the City of London post-Brexit. The UK has now lost yet another one of its largest tech listings to foreign ownership, following Aveva’s imminent delisting from the LSE. It is stung by yet another repercussion of a politically and economically turbulent year for the British government.
The AVEVA Group is one of Britain’s oldest technology, engineering and consulting firms focusing on infrastructure, energy and manufacturing, which was created as a joint venture by the Ministry of Technology and the University of Cambridge in 1967.
Following Schneider Electric’s acquisition of a majority stake in AVEVA in 2017, the French multinational conglomerate gained ownership of 60% of AVEVA shares. However, in one of the largest UK acquisition deals of 2022, Schneider have agreed to buy out AVEVA’s remaining minority shareholders in a deal valued at roughly £4 billion. In a potentially worrisome move for AVEVA’s minority shareholders, one of the UK’s oldest technology companies will fall into foreign ownership following Schneider’s total takeover, marking yet another major UK technology business to delist from the LSE.
Such an acquisition has contributed to the growing trend of concern for the future of UK technology companies. AVEVA was one of the UK’s few major listed technology businesses remaining. Yet, with only a small percentage of their sales stemming from the UK itself, we must reflect on the impact of the global energy interests as it focuses away from the UK.
UK tech companies are becoming increasingly convenient opportunities for foreign-backed investors. Low valuations for UK companies, coupled with the weaker Sterling, have become prime targets for foreign acquisitions at somewhat diluted valuations.
Is the acquisition of UK tech companies by foreign investors going to become a devastating reoccurrence for the UK’s fiscal trajectory? Can it be mitigated? Research director Tania Wilson for TechMarketView’s Foundation Service underlines the urgency in which the UK must act to retain its productivity and capital in the technology sector: ‘If AVEVA is taken fully private and the merger of Avast with NortonLifeLock goes ahead, the FTSE 100 will be left with just one software and IT services company, accounting software provider Sage.’[1]
Undoubtedly, the UK economy is exacerbated by the departure and increasing scarcity of major UK tech players. If Mr Karteng’s forecast for a ‘Big Bang 2.0’ has any likelihood of fruition, the UK must invest and strengthen its flailing grip on the productivity of the technology sector if we are to nurture and enable the growth and advancement of our tech industries.
[1] Tania Wilson, < https://www.techmarketview.com/news/archive/2022/09/05/ukhotviewsextra-share-performance-in-august-2022 >
