Bulletin: Schneider Has Enough Rating Headroom To Absorb Aveva Buyout

MADRID (S&P Global Ratings) Sept. 21, 2022--S&P Global Ratings said today that it expects France-based Schneider Electric S.E. (A-/Stable/A-2) to absorb temporarily higher pro forma leverage following the proposed buyout of U.K.-based industrial software company, Aveva Group PLC. Schneider announced on Sept. 21, 2022, that it will acquire the remaining 40% of Aveva's share capital for a total of €4.5 billion. We understand that Schneider will fund this via bridge financing, which it will refinance over the course of the year. The transaction will likely close in the first quarter of 2023, after all authorizations are complete. We believe that Schneider has sufficient rating headroom to carry out the transaction. In our base case, we expect that the company's leverage

...September 21, 2022 MADRID (S&P Global Ratings) Sept. 21, 2022--S&P Global Ratings said today that it expects France-based Schneider Electric S.E. (A-/Stable/A-2) to absorb temporarily higher pro forma leverage following the proposed buyout of U.K.-based industrial software company, Aveva Group PLC. Schneider announced on Sept. 21, 2022, that it will acquire the remaining 40% of Aveva's share capital for a total of 4.5 billion. We understand that Schneider will fund this via bridge financing, which it will refinance over the course of the year. The transaction will likely close in the first quarter of 2023, after all authorizations are complete. We believe that Schneider has sufficient rating headroom to carry out the transaction. In our base case, we expect that the company's leverage will increase to 2.1x in 2023, which compares with our previous estimate of 1.4x. Still, this leaves sufficient headroom under our current leverage threshold of 2.5x. We expect that leverage will gradually...

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