Altair Engineering (ALTR, Financials), may face regulatory scrutiny over its $10.6 billion sale to Siemens (SIEGY, Financials), according to Oppenheimer analyst Ken Wong.
With the transaction likely to finalize in the second part of next year, Siemens agreed to pay $113 per share in cash for Altair.
Developing engineering software used in sectors like aerospace, automotive, energy, and financial services, Altair saw its shares drop 4.3% Thursday under market worries about the longer schedule and possible regulatory investigation.
Given Siemens's vast platform for Computer-Aided Design, Product Lifecycle Management, and Simulation as well as its reputation as a top Electronic Design Automation supplier, Wong pointed out that the purchase might provide difficulties. Wong also advised that given the deal's possible influence on important industries like technology and automotive, China's State Administration for Market Regulation might call for an official evaluation of the agreement.
Siemens' plan to grow its division on digital industries and enhance its industrial software products includes acquisition. Altair's real-world scenario-based product performance prediction tool fits Siemens' aim to strengthen its position in the expanding industrial software industry.
Two years after the merger closes in the second half of 2025, Siemens expects it to increase profits per share by. By around 8%, the purchase is also expected to boost Siemens' digital business income, adding over 600 million euros ($651.4 million) yearly.
Both businesses will have to negotiate legal obstacles as the deal moves forward in order to enjoy the expected advantages of the purchase.
