Siemens To Improve Software Operations Through $4.5B Deal

By Czarina Ara Lasco

Nov 15, 2016 06:00 AM EST

Siemens said on Monday that the company will purchase the stocks of the Mentor Graphics shareholders for $37.25 per share which is a 21 percent premium to the market's closing price on Friday. The company also anticipates funding its plan of acquisition from its cash reserves.

Joe Kaeser, Siemens' Chief Executive has planned to augment the company in order to attract more revenues through selling off non-core businesses and invest on fields such as software operations which are likewise means of profit development and larger margins.

 Mentor Graphics, Inc is a US-based multinational corporation dealing in electronic design automation (EDA) for electrical engineering and electronics. In 2001, it was ranked third in the EDA industry it helped create. Founded in 1981, the company is headquartered in Wilsonville, Oregon, and employs roughly 5,200 people worldwide with annual revenues of around $1 billion.

Siemens has proudly announced that so far, the company has all the software that is necessary in developing complex electronic machineries including aeroplanes, trains and cars.

On Monday, during a conference call with several analysts and journalists, Siemens' Finance Chief Ralf Thomas said, "Our customers are driving a paradigm shift toward more and more complex and smart connected products such as autonomous vehicles."

"This acquisition is our answer to this development," Thomas furthered.

According to reports, said acquisition deal will increase the software revenue of Siemens by about a third from 3.3 billion euros, to around 6 percent of group revenue.

Siemens AGis a German company headquartered in Berlin and Munich and the largest engineering company in Europe with branch offices abroad.

The principal divisions of the company are Industry, Energy, Healthcare, and Infrastructure & Cities, which represent the main activities of the company. The company is a prominent maker of medical diagnostics equipment and its medical health-care division, which generates about 12 percent of the company's total sales, is its second-most profitable unit, after the industrial automation division.

It is also a component of the Euro Stoxx 50 stock market index. According to their annual report, Siemens and its subsidiaries employ approximately 362,000 people worldwide and reported global revenue of around €75.6 billion in 2015.

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