Aveva awaits US approval for Schneider merger, disappointed on tax ruling

Aveva's £3bn agreed merger with Schneider Electric is expected to gain final regulatory approval by mid-February, though the industrial software group was disappointed by a UK tax ruling on the deal.

As part of the merger, Aveva shareholders will receive a total cash consideration of £650m on completion along with 40% of the enlarged group.

Aveva had asked Her Majesty's Revenue and Customs to clarify the tax treatment of the cash return, but contrary to earlier tax advice the company received, the tax authority said it would be treated as a distribution and therefore taxed as income in the hands of recipients for UK tax purposes.

The company said it intends to have further discussions with HMRC on this matter but "considers it appropriate at this stage to draw the uncertainty over the tax treatment of the return of value to the attention of its UK shareholders" and said investors "may wish to seek their own tax advice in this regard".

The merger has cleared all but one of its regulatory hurdles and is only awaiting Committee on Foreign Investments in the United States (CFIUS), which is expected between late January and mid-February 2018.

The search for a chief executive to lead the enlarged group is ongoing.