Siemens' $10.6 billion Altair deal strengthens its industrial software offering
Acquisition is Siemens' second biggest
Price an 18.7% premium to Altair's Oct. 21 close
Deal to complete in second half of 2025
Recasts, adds details, background throughout
By John Revill
Oct 31 (Reuters) -Siemens SIEGn.DE is to buy U.S. engineering software firm Altair Engineering ALTR.O for $10.6 billion, strengthening its position in the growing market for industrial software.
The deal, Siemens's second biggest acquisition, is part of the German engineering group's increased focus on a sector being revolutionised by data analysis and artificial intelligence.
Michigan-based Altair is active in the product lifecycle management (PLM) industry - systems that manage product life-cycles from conception to development, manufacture, service and disposal.
The market for PLM simulation software is currently $10 billion per year and will grow by 10% over the next five years, Siemens said.
Following the deal, the Munich-based company will increase its market share from 9% to 15%, lifting it from number 4 to number 2 behind Ansys ANSS.O, which has 23%.
Other rivals include privately-held MathWorks with 14%, and Dassault Systemes DAST.PA with 10% of the market.
Siemens CEO Roland Busch said combining Siemens' online digital platform Xcelerator with Altair "will create the world's most complete AI-powered design and simulation portfolio".
The transaction is anticipated to add to Siemens' earnings per share in about two years from the deal's closing, expected in the second half of 2025.
It will also add about $500 million in annual revenue to Siemens in the mid-term and more than $1 billion per year in the long term, Siemens said.
Analysts were cheered by the acquisition, but there were some concerns about the price, an 18.7% premium to Altair's close on Oct. 21, a day before Reuters first reported the company was exploring a sale.
Analysts at Alpha Wertpapierhandel said the deal, while not cheap, would strengthen Siemens' struggling digital industries division.
Jefferies analyst Simon Toennessen said the acquisition gave Siemens more expertise around artificial intelligence and high performance computers.
It would also make the group a more credible rival to chip-design company Synopsys SNPS.O, which agreed to buy Ansys earlier this year, as well as Cadence Design Systems CDNS.O..
Siemens also announced on Thursday it was selling its airport baggage and cargo handling business to Vanderlande, owned by Toyota Industries Corporation 6201.T, for 300 million euros.
The company was the last portfolio company held by Siemens - a batch of company laggards earmarked for turnaround and sale because they did not fit the company's focus on transport, factory automation and smart buildings.
($1 = 0.9211 euros)
Reporting by John Revill in Zurich, Emma-Victoria Farr in Frankfurt; Additional reporting by Arsheeya Bajwa in Bengaluru; Editing by Maju Samuel and Jan Harvey
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
