German technology company Siemens has announced plans to acquire Altair Engineering, a US-based simulation software provider, for $10.6 billion in an all-cash deal that strengthens its position in the industrial software market.

Under the terms of the agreement, Siemens will pay $113 per share for Altair, representing a 19 per cent premium to the company's closing price on October 21, before media speculation about a potential deal emerged.

"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," said James Scapa, Altair's founder and chief executive officer.

The acquisition will boost Siemens' digital business revenue by 8 per cent, adding approximately €600 million to its digital business revenue of €7.3 billion reported in fiscal year 2023.

Roland Busch, president and chief executive officer 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 by combining the real and digital worlds."

The company expects to achieve revenue synergies of more than $500 million per year in the mid-term, growing to more than $1 billion per year long-term. Siemens also aims to achieve cost synergies with an EBITDA impact of more than $150 million per year by year two after closing.

The transaction, which has been unanimously approved by Altair's board of directors, is expected to close in the second half of 2025, subject to regulatory approvals and other customary closing conditions.

Michigan-based Altair, founded in 1985, provides software solutions in simulation, high-performance computing, data analytics, and artificial intelligence. The company employs over 3,500 people worldwide, with approximately 1,400 working in research and development.

The deal represents Siemens' largest acquisition since its healthcare unit Siemens Healthineers bought Varian Medical Systems in 2020, and comes amid growing consolidation in the engineering software sector, following Synopsys' $35 billion acquisition of Ansys earlier this year.

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