Siemens' $10 Billion Acquisition of Altair: A Game Changer in Industrial Software
Wednesday, Oct 30, 2024 6:20 pm ET
2min read Siemens AG, a leading technology company focused on industry, infrastructure, mobility, and healthcare, has agreed to acquire software maker Altair Engineering Inc. for approximately $10 billion. This strategic move is set to strengthen Siemens' position in industrial software and artificial intelligence, creating the world's most complete AI-powered design and simulation portfolio.
Altair, a global leader in computational intelligence, provides software and cloud solutions in simulation, high-performance computing (HPC), data analytics, and AI. Its expertise in simulation, data science, and HPC complements Siemens' existing portfolio, enhancing Siemens' comprehensive Digital Twin and enabling faster time-to-market and accelerated design iterations. Altair's capabilities in mechanical and electromagnetic simulation, along with its data science and AI-powered simulation expertise, will further bolster Siemens' offerings.
The acquisition is expected to generate significant cost and revenue synergies for Siemens. Altair's capabilities will increase Siemens' digital business revenue by 8%, adding approximately €600 million to its current €7.3 billion. Additionally, the transaction is projected to be EPS (pre-PPA) accretive by year two post-closing, further enhancing Siemens' financial performance.
Through the acquisition of Altair, Siemens gains access to new markets and customer segments, primarily in the manufacturing, life sciences, energy, and financial services sectors. Altair's customer base includes thousands of global clients, expanding Siemens' reach and customer base. This integration will enable Siemens to offer more comprehensive solutions to existing customers, driving revenue growth and cost synergies.
Siemens' acquisition of Altair marks a significant milestone in its commitment to accelerate the digital and sustainability transformations of its customers by combining the real and digital worlds. The addition of Altair's capabilities in simulation, high performance computing, data science, and artificial intelligence together with Siemens Xcelerator will create the world's most complete AI-powered design and simulation portfolio.
The integration of Altair's AI-powered design and simulation capabilities will significantly enhance Siemens' Xcelerator platform. Altair's strengths in simulation, high-performance computing, data science, and artificial intelligence will complement Siemens' existing portfolio, creating a full-suite, physics-based simulation portfolio as part of Xcelerator. This will enable Siemens to offer a more comprehensive Digital Twin, unlocking its industrial domain expertise in product lifecycle and manufacturing processes.
As Siemens continues to exit heavy equipment businesses and shift to higher-margin, software-driven product lines, the acquisition of Altair is a strategic move that aligns with its long-term growth strategy. Under CEO Roland Busch, Siemens has been focusing on catching up to the profitability of automation peers like Rockwell Automation Inc. and Schneider Electric SE. The takeover of Altair is a testament to Siemens' commitment to investing in cutting-edge technology and innovation to drive its future growth.
In conclusion, Siemens' acquisition of Altair Engineering Inc. for $10 billion is a strategic investment that strengthens Siemens' position in industrial software and AI. The integration of Altair's capabilities in simulation, data science, and HPC will enhance Siemens' comprehensive Digital Twin, enabling faster time-to-market and accelerated design iterations. This acquisition is expected to generate significant cost and revenue synergies, contributing to Siemens' financial performance and solidifying its leadership in the industrial software market.
Altair, a global leader in computational intelligence, provides software and cloud solutions in simulation, high-performance computing (HPC), data analytics, and AI. Its expertise in simulation, data science, and HPC complements Siemens' existing portfolio, enhancing Siemens' comprehensive Digital Twin and enabling faster time-to-market and accelerated design iterations. Altair's capabilities in mechanical and electromagnetic simulation, along with its data science and AI-powered simulation expertise, will further bolster Siemens' offerings.
The acquisition is expected to generate significant cost and revenue synergies for Siemens. Altair's capabilities will increase Siemens' digital business revenue by 8%, adding approximately €600 million to its current €7.3 billion. Additionally, the transaction is projected to be EPS (pre-PPA) accretive by year two post-closing, further enhancing Siemens' financial performance.
Through the acquisition of Altair, Siemens gains access to new markets and customer segments, primarily in the manufacturing, life sciences, energy, and financial services sectors. Altair's customer base includes thousands of global clients, expanding Siemens' reach and customer base. This integration will enable Siemens to offer more comprehensive solutions to existing customers, driving revenue growth and cost synergies.
Siemens' acquisition of Altair marks a significant milestone in its commitment to accelerate the digital and sustainability transformations of its customers by combining the real and digital worlds. The addition of Altair's capabilities in simulation, high performance computing, data science, and artificial intelligence together with Siemens Xcelerator will create the world's most complete AI-powered design and simulation portfolio.
The integration of Altair's AI-powered design and simulation capabilities will significantly enhance Siemens' Xcelerator platform. Altair's strengths in simulation, high-performance computing, data science, and artificial intelligence will complement Siemens' existing portfolio, creating a full-suite, physics-based simulation portfolio as part of Xcelerator. This will enable Siemens to offer a more comprehensive Digital Twin, unlocking its industrial domain expertise in product lifecycle and manufacturing processes.
As Siemens continues to exit heavy equipment businesses and shift to higher-margin, software-driven product lines, the acquisition of Altair is a strategic move that aligns with its long-term growth strategy. Under CEO Roland Busch, Siemens has been focusing on catching up to the profitability of automation peers like Rockwell Automation Inc. and Schneider Electric SE. The takeover of Altair is a testament to Siemens' commitment to investing in cutting-edge technology and innovation to drive its future growth.
In conclusion, Siemens' acquisition of Altair Engineering Inc. for $10 billion is a strategic investment that strengthens Siemens' position in industrial software and AI. The integration of Altair's capabilities in simulation, data science, and HPC will enhance Siemens' comprehensive Digital Twin, enabling faster time-to-market and accelerated design iterations. This acquisition is expected to generate significant cost and revenue synergies, contributing to Siemens' financial performance and solidifying its leadership in the industrial software market.
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