Siemens Acquires Altair for $10.6 Billion to Strengthen Software Sector

Siemens AG is preparing to acquire Altair Engineering Inc. for $10.6 billion in a bid to enhance its industrial software capabilities. Today, leading American engineering software company Altair confirmed the deal. This acquisition is seen as a significant expansion move for Siemens in the industrial software market.

The purchase price of $113 per share reflects an 18.7% premium over Altair's closing price on October 21, when news of the company's potential sale emerged. This acquisition will be the largest for the German conglomerate since its subsidiary Siemens Healthineers purchased Varian Medical Systems for $16.4 billion in 2020.

Altair's expertise lies in simulation software that predicts product performance in real-world scenarios. This aligns with Siemens' strategy of integrating physical and digital operations. Traditionally recognized for manufacturing trains and factory equipment, Siemens is enhancing its digital services to improve the efficiency of production lines, trains, and buildings.

This strategic move positions Siemens in direct competition with industry giants such as Rockwell Automation (NYSE:ROK), Emerson Electric (NYSE:EMR), and ABB (ST:ABB) in a market valued at approximately $21.5 billion annually. According to Markets and Markets research, increasing demand for artificial intelligence and data analytics in managing complex systems is expected to raise this sector’s value to $46.6 billion by 2029.

Siemens has prioritized industrial automation as one of its core business areas. Although CEO Roland Busch previously indicated a preference for smaller deals, he has expressed intent to expand the software division.

CFO Ralf Thomas highlighted the company's interest in software acquisitions during an interview last month, mentioning Siemens' goal of strengthening its factory automation presence in the U.S. market as a balance against challenges in China.