(Bloomberg) — Siemens AG is close to agreeing to a deal to buy software maker Altair Engineering Inc., people familiar with the matter said, in what would be its largest-ever acquisition.
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The German engineering group is putting the finishing touches on a transaction that could be announced as soon as Wednesday, according to the people, who asked not to be identified discussing confidential information. Bloomberg News reported last week that Siemens was in talks to buy Troy, Michigan-based Altair.
Shares in Altair, which rose as much as 11% on Tuesday, closed up 8.5% in New York. The stock has now gained 32% this year, giving the company a market value of $9.46 billion. Altair is scheduled to report earnings on Oct. 30.
While deliberations are at an advanced stage, they could still be delayed or falter, the people said. Representatives for Siemens and Altair declined to comment.
Led by Founder and Chief Executive Officer James Scapa, Altair provides engineering software to companies in the aerospace, automotive, energy and financial services industries, among others. Demand for such tools is expected to grow in lockstep with the increased adoption of artificial intelligence in everyday life.
Under CEO Roland Busch, Siemens has been exiting heavy equipment businesses and shifting to higher-margin, software-driven product lines to catch up to the profitability of automation peers like Rockwell Automation Inc. and Schneider Electric SE.
Bloomberg Intelligence senior analyst Omid Vaziri wrote on Tuesday that Siemens’ potential acquisition of Altair would be in line with the company’s digital strategy and be a “good fit” with its digital industries software.
“Altair’s high valuation means investors may score the deal on Siemens’ ability to generate a leading return on investment,” Vaziri wrote. “The possibility of other software companies bidding could make this a challenging test.”
A takeover of Altair would surpass Siemens’s biggest-ever acquisition, the purchase of oil-and-gas equipment maker Dresser-Rand Group Inc. for $7.6 billion including debt in 2015, according to data compiled by Bloomberg.
–With assistance from Joe Ryan.
(Updates with closing share price in third paragraph.)
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