Siemens to Acquire UGS Corp.

By DE Editors

Siemens AG (Munich, Germany) will purchase UGS Corp.(Plano, TX) for an estimated $3.5 billion. No timeline has been set forthe closing of the acquisition as the two companies are currentlyworking with the relevant regulatory authorities. Today’s announcementsays Siemens will expand its industrial software portfolio byintegrating the more than 3,000 software engineers who work for UGS.

According to UGS spokesperson John Clendening, no other productlifecycle management (PLM) company will compete with the end-to-endsoftware and hardware portfolio to be offered by the combinedcompanies. The Siemens Automation and Drives Group (AandD) is beingassigned the UGS activities and will employ around 7,000 softwareexperts in total. Clendening said UGS did not expect layoffs to be asignificant issue because “there is very little duplication between thetwo companies.”

UGS employs 7,300 people worldwide and has customers in 62 countries. Siemens AandD employs 70,528 people worldwide.

UGS, which supplies the entire array of collaborative product datamanagement (cPDM), CAD/CAM/CAE, and digital manufacturing simulationsolutions to the automotive, aerospace, consumer goods, electronics,and machinery industries, started a business relationship with SiemensAandD in 2003 with joint projects addressing digital manufacturingtechnology. In fiscal 2005, the company reported revenue of just under$1.2 billion, in the third quarter of 2006, the company reported its13th consecutive quarter of year-over-year revenue growth.

“The combination of Siemens and UGS is a clear game-changer in theglobal PLM industry,” said Tony Affuso, chairman, CEO, and president ofUGS. “Our customers win through the backing of the long-term securityof their system investments. ... In addition, we are able to provideadded value to Siemens’ customers by virtue of being the most practicedPLM provider in open systems, which eases integration with the Siemenstechnology already in place in all of our key markets.”

At an afternnon press conference via webcast, Tilos Brandis, Siemens’ senior executive and integration officer, described the Siemens/UGScombination asuniting “the virtual and physical world.”

In a prepared statement about the acquisition, Siemens AG Presidentand CEO Klaus Kleinfeldsaid, “This combination makes our customers’ processes faster, better,and more cost efficient. With the unique combination, we underscore ourposition as a trendsetter in automation systems and bring this businessinto a new dimension.”

That new dimension is seen by Siemens andUGS to at least partially translate into new scales of efficiency forcustomers whether in manufacturing or engineering services. Integratedsolutions created by the combined companies are expected to lead toreduced production costs, higher product quality, shorter times tomarket, and increased flexibility with regard to market trends.

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Sources: Press materials received from the company and additional information gleaned from the company’s website.