Siemens plans to acquire Altair Engineering for $10.6 billion, aiming to boost its position in the rapidly expanding industrial software market.

Siemens is offering $113 per share for Altair, about an 18.7% premium over Altair’s closing price on 21st October, a day before reports emerged that the company was considering a sale.

This acquisition of Michigan-based Altair marks Siemens’s largest purchase since its Healthineers unit acquired medical device maker Varian Medical Systems for $16.4 million in 2020.

Altair’s simulation software, designed to predict real-world product performance, aligns with Siemens’s goal of integrating real and digital systems through its hardware and software.

Siemens, a leader in trains and factory equipment, is expanding into digital services to enhance the performance of its production lines, trains, and buildings, competing with companies like Rockwell Automation, Emerson Electric, and ABB.

The industrial software market, valued at around $21.5 billion annually, is expected to grow to $46.6 billion by 2029, with a 16.7% yearly growth rate driven by demand for AI and data analytics in managing complex systems.

Industrial automation is a key business area for Siemens, and CEO Roland Busch aims to grow its software segment, though he has traditionally favoured smaller acquisitions.

CFO Ralf Thomas recently highlighted Siemens’s goal of strengthening its presence in U.S. factory automation to balance challenges in China, showing an interest in expanding through software acquisitions.

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