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(Added details and analyst comments, paragraphs 3-5, 10-11)
Schneider Electric SCHN.PA is in talks with U.S. engineering software maker Bentley Systems BSY.O for a potential “strategic transaction”, it said on Friday without elaborating, leading to a 2% drop in the French company’s shares.
Reuters reported Thursday that Bentley Systems, which has a market value of nearly $16 billion, was exploring options, including a sale, after attracting acquisition interest.
Among the companies that have expressed interest in a deal with Bentley are Schneider and design software company Cadence Design Systems CDNS.O , one of the sources said.
Schneider said discussions were at an early stage and there was no certainty about a possible transaction.
In the event of a full takeover and at current valuations, the operation would rank among the top 10 acquisitions made in the United States by a French company, according to financial data company Dealogic. The largest transaction recorded in recent years was the acquisition of Tiffany by LVMH in 2021 for $16.2 billion.
Schneider, which specializes in energy management equipment for homes, industry and data centers, has sought to grow its software business through acquisitions in recent years.
In late 2022, it reached an $11.9 billion deal to acquire British software company Aveva Group, after a long battle with investors who demanded a higher price.
Bentley Systems, which is controlled by the Bentley family through a special class of stock, has formed a special committee of its board to explore options, sources familiar with the matter told Reuters.
Options include an outright sale of the company as well as a joint venture, they said.
“We are surprised that Schneider is exploring an acquisition of this magnitude,” Berenberg analysts said, noting that this appears to be at odds with its message of “evolution not revolution.”
Schneider has a market capitalization of about $132 billion, compared to Bentley’s $15.6 billion, according to LSEG data.
($1 = 0.9390 euros)