Categories: Money

Siemens to buy U.S.-based Mentor in $4.5 billion deal

Siemens agreed to buy U.S.-based Mentor Graphics in a $4.5 billion all-cash deal that will further build the German engineering group’s software capabilities.

Siemens said on Monday it would pay $37.25 per share for Mentor – which makes software for designing semiconductors – a 21 percent premium to Friday’s closing share price.

Siemens has increasingly had to compete with software companies that can develop technology faster because they have a sole focus and have identified software as a growth area in its part of its “Vision 2020” strategy.

Siemens expects the acquisition of Mentor to add to its earnings within three years and result in savings that will lift earnings before interest and tax (EBIT) by more than 100 million euros ($108 million) within four years.

People familiar with the matter had flagged the planned deal to Reuters, saying Siemens would pay $4.5 billion to $4.6 billion for Mentor.

Deutsche Bank and JP Morgan advised Siemens on the transaction.

Sameer
Sameer is a writer, entrepreneur and investor. He is passionate about inspiring entrepreneurs and women in business, telling great startup stories, providing readers with actionable insights on startup fundraising, startup marketing and startup non-obviousnesses and generally ranting on things that he thinks should be ranting about all while hoping to impress upon them to bet on themselves (as entrepreneurs) and bet on others (as investors or potential board members or executives or managers) who are really betting on themselves but need the motivation of someone else’s endorsement to get there.

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