Siemens AG, Germany’s industrial powerhouse, is acquiring US-based Altair Engineering in a $10.6 billion deal, marking Siemens’ biggest acquisition since 2020.
Siemens aims to bolster its industrial software division by integrating Altair’s advanced simulation software, which predicts product performance in real-world scenarios.
The acquisition aligns with Siemens’ strategy to enhance its digital capabilities beyond traditional industrial operations, reinforcing its focus on combining digital and physical systems to streamline processes in factories, trains, and buildings.
The transaction is anticipated to add to Siemens’ earnings within two years post-closing, expected in the latter half of 2025.
With Altair’s simulation technology, Siemens expects an 8% boost in its digital business revenue in fiscal 2023, which equates to roughly €600 million.
The acquisition’s longer-term outlook projects $500 million in annual revenue, potentially doubling to over $1 billion as demand for industrial software grows.
Altair’s software will enhance Siemens’ ability to help manufacturers test products digitally, aiding industries like automotive, aerospace, and consumer goods in accelerating product development.
Siemens-Altair Engineering deal
The $113 per-share acquisition price represents an 18.7% premium to Altair’s share price as of October 21, before the news of its potential sale.
The premium underscores Siemens’ commitment to advancing its presence in the industrial software sector, valued at $21.5 billion globally.
Altair’s acquisition will help Siemens compete more effectively against industry giants like Rockwell Automation, Emerson Electric, and ABB, strengthening its foothold in the industrial software market.
As Siemens seeks to increase its market share in industrial automation, Altair’s strong US presence offers strategic value.
Siemens’ CEO Roland Busch has indicated that the company intends to expand its software and digital offerings in the US to balance out weakened performance in the Chinese market.
Siemens CFO Ralf Thomas, in a recent interview, highlighted software acquisitions as a means to grow Siemens’ automation business, particularly in the United States, where demand for smart manufacturing solutions is rising.
Altair’s software aligns with Siemens’ strategy to combine hardware with cutting-edge software, enhancing the efficiency of Siemens’ production lines, infrastructure, and transport solutions.
Siemens’ focus on factory automation and digital transformation is expected to be significantly strengthened by Altair’s product suite, offering manufacturers advanced capabilities to simulate and test products before they reach the market.
This acquisition also supports Siemens’ broader vision of enabling a “digital-physical convergence” across its products and services.
The transaction is expected to contribute to Siemens’ earnings per share (EPS) by 2027, two years after the deal’s anticipated close in 2025.
This timeframe reflects Siemens’ focus on long-term profitability through investments in digital transformation and industrial automation.
Altair’s technology will be instrumental in Siemens’ digital push, allowing the company to capture a larger share of the $21.5 billion industrial software market.
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