Siemens To Buy Altair For $10.6 Billion To Boost Its Digital Portfolio

Between January to September of 2024, the global valuation of M&As increased by roughly 10% compared to the same period in 2023. Hence, it is no surprise that we're seeing yet another strategic acquisition.

This time, Siemens has made a big move in the industrial software space with its plan to acquire Altair Engineering, a US-based engineering software firm, for $10.6 billion.

The German technology giant said that the deal aimed to strengthen its presence in the industrial simulation and software market. The acquisition of Altair, Siemens' largest since 2020, is expected to help it boost its digital services portfolio.

Moreover, with Altair’s expertise in industrial simulation and AI-driven software, Siemens looks to better support its customers in transitioning to more sustainable and digitized strategies.

So, let’s explore what this acquisition means for Siemens, Altair and the broader industrial software landscape. Read on!

What Did Siemens Announce?

Siemens confirmed that it has agreed to acquire Altair Engineering for $113 per share, a 19% premium over Altair's stock price on the 21st of October (before the deal went public) and a 13% premium over its highest closing price. This brings the total valuation of Altair’s acquisition to nearly $10 billion.

This move aligns with Siemens' strategy to boost its presence in the industrial software space. With Altair’s industry expertise in simulation, high-performance computing, data science and artificial intelligence, Siemens has created one of the most comprehensive AI-powered design and simulation portfolios on the market.

Siemens also expects this acquisition to enhance its revenue from the digital business segment by 8%, adding almost EUR 600 million to Siemens' digital business revenue. Moreover, Siemens also aims for long-term revenue growth with Altair contributing up to $1 billion annually post-merger.

With Altair renowned for making simulation software, combining it with Siemens' digital twin strategy will help it become more competitive and an important player in the industrial software market.

What Did The Stakeholders Say About The Move?

Roland Busch, the President and CEO of Siemens, said, "Acquiring Altair marks a significant milestone for Siemens. This strategic investment aligns with our commitment to accelerate the digital and sustainability transformations of our customers."

Moreover, Ralf P. Thomas, Siemens' CFO, emphasized the financial benefits of the move, noting that the acquisition will benefit its earnings per share (EPS) within two years post-closing.

James Scapa, the founder and CEO of Altair, said about the move, "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 believe this combination of two strongly complementary leaders in the engineering software space will create exciting opportunities for growth and innovation.”

The deal isn't yet official and will go through in the second half of 2025, although it depends on getting the necessary governmental approvals. Siemens plans to pay for the whole deal with money it already has on hand, keeping its high credit rating the whole time.

Conclusion

Most market experts say that combining Altair's powerful simulation and AI-based solutions will give Siemens an edge in the industrial software market. Altair's data science and AI skills will integrate well with Siemens' existing tools, enabling its customers to become more efficient in developing and getting products to the market more quickly.

However, some experts are worried about the high price Siemens paid for Altair, since Siemens shares went down after the news came out. Even with these worries, the long-term future of the move looks positive with Siemens looking to boost its presence in the industrial simulation and analysis software markets.

Do you think that this deal will help Siemens stay ahead of the competition in AI-driven simulation and analysis software? Can the deal help improve Siemens’ position in the digital industrial software market?

Tell us what you think in the comments below!