French energy giant Schneider Electric has cancelled the complex £1.3bn intended deal (€1.8bn), which involved the acquisition of UK-based engineering software provider Aveva Group.

The French firm had announced about the possible takeover in July, which would have entitled it to own a controlling 53.5% stake in Aveva for an investment of £550m (€761m), but Aveva has cited unanticipated costs and risks related to the proposed merger for termination of the deal. The company explained :

“During the due diligence process significant integration challenges were identified that could not be overcome without considerable additional risk and cost. This was exacerbated by the highly complex structure of the proposed transaction.”

The complex deal would have involved Aveva acquiring Schneider’s industrial software unit — Schneider Software — but the French company would in turn have taken a majority stake in Aveva. The two companies had previously said there was a “clear and compelling industrial logic and strategic rationale” for the tie-up.

Neither company will have to pay a break fee as the terms of the transaction were non-binding.

Schneider Electric said: “The two parties have decided to stop their discussions by mutual consent as no agreement could be reached on the terms of transaction.”

The firms had previously termed the tie-up to be based on a “clear and compelling industrial logic and strategic rationale.”

Aveva chief executive Richard Longdon was quoted by the Financial Times as saying:

“The sad thing is the industrial logic was always good and still is. But they say that time kills deals. Too much time had gone on.”