Schneider Electric will acquire US engineering software provider PTC in a $23.7bn deal that marks the French industrial conglomerate’s biggest takeover.
The all-cash transaction of $205 a share values PTC’s equity at about $22.6bn and represents a 42 per cent premium to the last closing price. Schneider’s shares fell more than 9 per cent on Monday morning, while PTC’s shares jumped 34 per cent in pre-market trading.
The deal, first reported on Sunday by the FT, will boost Schneider’s offering of software solutions that can aid manufacturers with designing industrial products and engineering specifications.
The company plans to fund the acquisition by issuing €5bn to €6bn in new shares and €16bn to €17bn in debt.
Shares in Schneider, which specialises in energy management and industrial automation, are up more than 15 per cent this year, valuing it at about €160bn and making the group one of France’s largest listed companies.
The 190-year-old company — which once made locomotives — provides energy and technology services to chipmakers such as Nvidia, and services for data centres now generate roughly a quarter of its sales.
Schneider’s chief executive Olivier Blum, who is less than two years in the job, said the combined group would create the industry’s “most complete software and AI powerhouse” to help customers improve their systems.
“We are doubling down in the digital world with PTC because the company that will win in the future will be the company with the knowledge on how things work in buildings, data centres, the infrastructure industry but also the company with digital capabilities,” Blum told the FT.
The transaction, which values PTC at $23.7bn including debt, fills a gap in Schneider’s software capabilities and triples the size of the market it can potentially address, the company said.
Analysts said the deal carried execution risks in a sector riddled with potential AI-driven disruption.
“The deal is mainly driven by revenue synergies, which can take more time and be harder to deliver [than cost savings],” analysts at Jefferies said, adding that the takeover “will also dilute the energy management and data centre business”.
PTC’s chief Neil Barua said his company would gain “substantial scale and resources to accelerate innovation” and the deal would allow it to expand into more markets.
PTC, founded in Boston in 1985, expects to generate up to $2.75bn in revenues in 2026. PTC’s shares have fallen about 15 per cent this year.
Buying PTC far eclipses Schneider’s $11bn takeover of UK-listed Aveva in 2023, which helped to extend the French group’s reach into industrial software.
PTC’s software, including design product Creo, will complement capabilities Schneider secured by buying Aveva, and will provide software to help design manufacturing plants and engineering processes.
The deal is a rare software transaction amid a marked slowdown in dealmaking in the sector as companies grapple with the implications of AI for their business models.
It also ranks among the larger cross-border transactions this year. In the three months to September 30, only 10 megadeals worth more than $10bn were agreed globally.
Blum said Schneider may not be done with acquisitions, though he added it was “clear we have a lot of work in front of us” following the PTC deal and other recent purchases.
In June, Schneider struck a $3.1bn deal to buy industrial data and AI provider Cognite. Last month, it announced it would pay $1.4bn to buy Bulgarian technology company Shelly Group, which makes at-home smart devices.
“We’ll continue to be attentive whenever there is a major gap,” Blum said.
“Our market is changing fast, technology is changing fast . . . we stay very attentive on anything else that can happen in our industry, that can disrupt our industry.”
Morgan Stanley was the lead financial adviser to Schneider, along with Goldman Sachs and Debevoise as legal counsel. Evercore advised PTC, along with law firm Paul Weiss.
Additional reporting by Sarah White in Paris