Siemens has announced a $10.6 billion deal to acquire Altair Engineering, a leading provider of engineering software. This acquisition is aimed at boosting Siemens' presence in the industrial software market, particularly in areas like simulation, data science, high-performance computing, and artificial intelligence.
The offer price of $113 per share represents a premium of about 18.7% to Altair's closing price on October 21, 2024. This deal is expected to close in the second half of 2025, following regulatory approvals and other customary closing conditions.
This acquisition aligns with Siemens' strategy to enhance its digital and sustainability transformations by combining the real and digital worlds. It's expected to create the world's most complete AI-powered design and simulation portfolio.
It is to be noted that upon completion of the acquisition, Altair’s common stock (Nasdaq: ALTR) will no longer be listed on any public stock exchange.
Further, the acquisition is expected to significantly strengthen Siemens' position in the industrial software market. Altair's expertise in simulation, data science, high-performance computing, and artificial intelligence complements Siemens' existing capabilities.
The industrial software market, currently valued at $21.5 billion, is expected to grow at an annual rate of 16.7%. Siemens aims to capture a larger share of this growing market through this acquisition.
“This acquisition represents the culmination of nearly 40 years in which Altair has grown from a startup in Detroit to a world-class software and technology company. We have added thousands of customers globally in manufacturing, life sciences, energy and financial services, and built an amazing workforce, and innovative culture,” said James Scapa, Altair’s founder and CEO. “We believe this combination of two strongly complementary leaders in the engineering software space brings together Altair’s broad portfolio in simulation, data science, and HPC with Siemens’ strong position in mechanical and EDA design. Siemens’ outstanding technology, strategic customer relationships, and honest, technical culture is an excellent fit for Altair to continue its journey driving innovation with computational intelligence.”
Besides Altair, Siemens, via it's spinoff Siemens Healthineers, acquired medical device maker Varian Medical Systems, in 2020, for $16.4 billion, aimed at expanding Siemens Healthineers' capabilities in cancer care. Siemens also acquired Flender, a provider of mechanical drive systems, for €900 million in 2020. This acquisition aimed to expand Siemens' capabilities in the energy and automation sectors.
In other notable industrial software acquisitions, Broadcom announced its plan to acquire VMware for whopping $61 billion, in 2023. This deal aims to create a leading infrastructure technology. Cisco acquired Splunk for $28 billion in the same year 2023, enhancing its capabilities in data and security analytics.
IBM acquired Octo Consulting Group for $1.3 billion in 2022, expanding its government IT modernization services.
These acquisitions reflect the ongoing consolidation and growth in the industrial software market, driven by the increasing demand for advanced technologies like AI, data analytics, and cybersecurity solutions.
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