Siemens acquires design automation and industrial software provider Mentor Graphics.
Provides mechanical, thermal, electrical, electronic, and embedded software design all in a single integrated platform.

Siemens is further expanding its portfolio of industrial-specific software and concretizing its "Vision 2020" plan to realize a Digital Industrial Enterprise.

Siemens and Mentor Graphics announced a merger agreement under which Siemens will acquire Mentor Graphics for $4.5 billion. This represents a 21% premium to Mentor Graphics' closing price on November 11, the last trading day prior to the announcement, for $37.25 per share. Mentor Graphics' board of directors has approved the merger, and Elliot Management, a Mentor Graphics stakeholder, has also expressed support for the acquisition.

▲ Siemens has further expanded its digital enterprise software portfolio with the acquisition of Mentor.

This acquisition expands Siemens' Digital Enterprise Software portfolio by providing Mentor Graphics with a solid foundation of solutions in electronic IC and system design, simulation, and manufacturing.

These capabilities are essential for today's smart connected products, such as autonomous vehicles. This combination of solutions capabilities allows Siemens to offer mechanical, thermal, electronic, and embedded software tools that enable customers to accelerate innovation, increase production efficiency, and optimize product operation in the field. For the first time, Siemens can optimize quality, efficiency, flexibility, safety, and speed across technology domains and across the entire lifecycle of an extended enterprise.

“Siemens’ acquisition of Mentor Graphics is part of our Vision 2020 strategy to become the new standard for next-generation industries,” said Joe Kaeser, President and CEO of Siemens AG. “Mentor Graphics is a perfect fit and a complete portfolio to expand Siemens’ digital leadership and drive our industry forward.”

“The acquisition of Mentor Graphics, a technology leader with a highly qualified workforce, will complement our world-class industrial software portfolio,” said Klaus Helmrich, member of the Siemens Executive Board. “It will complement our strong mechanical and software solutions with design, test, and simulation capabilities for electrical and electronic systems.”

Mentor Graphics is headquartered in Wilsonville, Oregon, USA, and operates offices in 32 countries worldwide. With over 5,700 employees, Mentor Graphics achieved revenue of approximately $1.2 billion and an adjusted operating margin of 20.2% for the fiscal year ended January 31, 2016. Siemens expects this positive margin to continue. In particular, Mentor Graphics is expected to make a significant contribution to the PLM (Product Lifecycle Management) software business of Siemens' Digital Factory division, which it will join.

Mentor Graphics serves a diverse client base of major systems specialists and large enterprises in the IC/semiconductor sector. Its global customer base spans approximately 4,000 companies across the communications, computer, consumer electronics, semiconductor, networking, aerospace, multimedia, and transportation industries. Mentor Graphics is recognized as a global leader in strategic industries, including IC design, test, and manufacturing, electronic device design and analysis, and emerging markets such as automotive.

“Combining Mentor Graphics’ technology leadership and strong customer base with Siemens’ global scale and resources will enable us to meet the growing needs of our customers and create significant additional opportunities for our employees,” said Walden C. Rhines, Mentor Graphics CEO and Chairman. “Siemens is an ideal partner with its financial depth and stability. Siemens’ resources and additional investment will enable Mentor Graphics to innovate more quickly and accelerate our vision of providing top-to-bottom automated electrical system design solutions. We are excited to join Siemens, which shares our values and is focused on customer success, and we believe this combination will deliver immediate and tangible value to our shareholders.”

Completion of the transaction is expected in the second quarter of 2017 and is subject to customary closing conditions. Mentor Graphics will become part of the PLM software business unit of Siemens' Digital Factory Division.

“By joining forces with Mentor Graphics’ electronic design automation solutions and talented experts, we are strengthening our core competencies in product design, enabling us to create an ultra-precise digital twin of any smart product or production line,” added Klaus Helmrich, Member of the Siemens Executive Board.