Billion-euro deal: Siemens takes over Altair

According to an agreement signed by Siemens, Altair shareholders will receive 113 dollars per share. The purchase is expected to be completed in the second half of next year. Altair Engineering has around 3,500 employees and provides industrial software for companies in the aerospace, automotive, energy and financial services sectors. Demand for this is expected to rise with the increasing use of artificial intelligence (AI) in everyday life.

Siemens CEO Roland Busch spoke of a "significant milestone" for the company. "Altair's expertise in simulation, high-performance computing, data science and artificial intelligence together with Siemens Xcelerator will create the world's most comprehensive AI-supported design and simulation portfolio."

Altair's simulation portfolio is a good addition, according to the company press release. In particular, with its capabilities in mechanical and electromagnetic simulation, Siemens is expanding its digital twin and can thus offer a complete, physics-based simulation portfolio as part of Xcelerator. Working with the simulation tools accelerates development and shortens the time to market, as well as speeding up product lifecycles and manufacturing processes.

This acquisition marks the culmination of nearly 40 years of Altair, commented James Scapa, founder and CEO of Altair. "We believe this combination of two highly complementary leaders in engineering software brings together Altair's broad portfolio in simulation, data science and high performance computing with Siemens' strong position in mechanical and EDA design."

Siemens itself last completed a takeover of a similar magnitude with Dresser-Rand in 2015. At that time for 7.6 billion dollars including debt. However, it was surpassed by the takeover of cancer specialist Varian by Siemens Healthineers for 16.4 billion dollars, which at the time was only a majority shareholding of Siemens after the IPO.

Siemens is increasingly focusing on its digitalization business and divesting peripheral areas. Just a few weeks ago, the Munich-based company completed the sale of Innomotics. Siemens had received around 3.5 billion euros for the business with electric motors and large drives with around 15,000 employees.

Siemens expects the acquisition of Altair to generate significant revenue and cost synergies. It is expected to increase revenue in Siemens' digital business by eight percent and increase reported revenue in this area by around 600 million euros in fiscal year 2023. In the long term, the Group expects a positive revenue effect of more than one billion dollars annually.

In the second year after closing, Siemens expects cost synergies to have a positive effect on earnings before interest, taxes, depreciation and amortization (EBITDA) of more than 150 million dollars per year. The transaction is also expected to have a positive impact on earnings per share before certain purchase price effects.