Siemens is buying Electronic Design Automation (EDA) house Mentor Graphics in a merger agreement costing $37.25 per share in cash, or about $4.5 billion.
The move is a way for Siemens to expand its digital industrial enterprise strategy for industrial software. Mentor Graphics software tools help in designing electronic systems such as printed circuit boards and integrated circuits. The tools help engineers to design and analyze entire semiconductors for a variety of industries including automotive, which Siemens sees as an important step toward autonomous vehicles.
“By adding Mentor’s electronic design automation solutions and talented experts to our team, we’re greatly enhancing our core competencies for product design that creates a very precise digital twin of any smart product and production line,” says Klaus Helmrich, member of the managing board at Siemens.
Siemens says the transaction is scheduled to be completed in the second quarter of 2017 pending regulatory approval.
Currently Mentor Graphics has more than 5,700 employees and has generated revenue of about $1.2 billion. The company will join the Siemens Digital Factory division, contributing to Siemens' product lifecycle management software business.