(Bloomberg) — Siemens AG is close to agreeing a deal to acquire software maker Altair Engineering Inc. to take over, people familiar with the matter said, in what would be the largest acquisition ever.
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The German engineering group is putting the finishing touches on a transaction that could be announced as early 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 acquire Troy, Michigan-based Altair.
Shares in Altair rose as much as 11% on Tuesday. The stock rose 7.8% at 2:45 p.m. in New York, giving the company a market value of about $9.4 billion. Altair is expected to report earnings on October 30.
Although 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 CEO James Scapa, Altair provides engineering software to companies in the aerospace, automotive, energy and financial services sectors, among others. The demand for such tools is expected to grow in parallel with the increasing adoption of artificial intelligence in everyday life.
Under CEO Roland Busch, Siemens has exited its heavy equipment business and moved to higher-margin software-driven product lines to boost 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 “a good fit” with its digital industry software.
“Altair’s high valuation means investors can evaluate the deal based on Siemens’ ability to generate industry-leading investment returns,” Vaziri wrote. “The possibility of other software companies bidding could make this a challenging test.”
A takeover of Altair would surpass Siemens’ largest 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 help from Joe Ryan.
(Updates with shares, Altair response and analyst commentary from the third paragraph.)
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