Schneider Electric, the maker of electrical equipment that has thrived from the AI build-out, on Monday struck a $23 billion deal to buy an industrial design software company at a bargain-basement valuation.
The French industrial giant said it would acquire Aveva Group PLC (AVE.LN) at 31 pounds ($38.44) a share, a 61% premium to Aveva’s closing price on Friday, but still representing a decade low valuation multiple of 15 times earnings.
The deal reflects the growing divergence between companies that are benefiting from the AI boom and those that are being left behind. Schneider Electric has seen its stock price soar in recent years as investors bet on its ability to capitalize on the demand for automation and energy efficiency.
Aveva, on the other hand, has struggled to keep pace. The company’s software is used by engineers to design and simulate industrial plants, but it has been slow to adapt to the changing needs of the market.
“This is a classic example of an AI winner taking out a loser,” said analyst Michael Hewson at CMC Markets. “Schneider Electric is a clear beneficiary of the AI boom, while Aveva is a company that is struggling to adapt.”
The deal is expected to close in the first half of 2024, subject to regulatory approvals.