The agreement was made between Siemens and the current owners Bain Capital, Silver Lake Partners and Warburg Pincus. The purchase price amounts to US $3.5 billion, including assumption of existing debt. The activities of UGS are to be assigned to the Siemens Automation and Drives Group (A&D).

A&D will thus become the first supplier for the manufacturing industries to provide an end-to-end software and hardware portfolio encompassing the complete lifecycle of products and production facilities. The transaction is subject to the approval by the relevant authorities.

With more than 46,000 customers in 62 countries serviced by a global workforce of 7,300, UGS, headquartered in Plano, Texas, US, is a worldwide leader in PLM software and services.

PLM is a mission-critical, enterprise business platform that helps companies innovate and grow by enabling them to digitally create, build and manage their products. UGS is a supplier to customers in the automotive, aerospace and defense, consumer goods, electronics and machinery industries around the world. UGS and Siemens A&D already started their business relationship in 2003 with joint projects addressing digital manufacturing technology.

UGS'' software portfolio covers the entire array of collaborative product data management (cPDM), computer-aided design / computer-aided manufacturing / computer-aided engineering (CAD/CAM/CAE) and digital manufacturing simulation (''digital factory''), the company holds strong revenue and market share positions globally in digital manufacturing and cPDM - the fastest-growing segments within the PLM market.

In fiscal 2005, the company reported revenue of just under $1.2 billion. In the third Quarter 2006, the company reported its 13th consecutive quarter of year-over-year revenue growth.

"With the acquisition of UGS, we combine its competence in the sector of digital factories with our leading know-how in industrial automation. This combination makes our customers'' processes faster, better and more cost efficient. With the unique combination, we underscore our position as a trendsetter in automation systems and bring this business into a new dimension," said Klaus Kleinfeld, president and CEO of Siemens AG.

By integrating more than 3000 software engineers of UGS, the group will have around 7000 software professionals. Helmut Gierse, president of Siemens A&D, explains, "Seamless flow of information and data enable collaboration across the whole value chain. This is becoming crucial to increase productivity in the manufacturing industries where the competitive pressure is constantly rising. With the combined portfolio of A&D and UGS, our customers will be able to enter a complete new scale of efficiency, whether they are manufacturers, engineering service partners, system integrators or machine builders.

"Integrated solutions will lead to reduced production costs, higher product quality, shorter time to market and increased flexibility toward market trends. On the basis of our unique offer, we aim at a long term continuation of sustainable value enhancement for A&D," he added.

Siemens A&D and UGS are each known for their leadership in open standards and interfaces in their respective industries. "By combining expertise in the physical world of automation and the virtual world of PLM software, Siemens will be the only company able to offer integrated software and hardware solutions to its customers throughout their whole production process. All our future industrial software and hardware products will support today''s and future leading interfaces and standards. We aim to be the first to market with innovative digital factory solutions, which truly unify the engineering and automation domain," stated Gierse.

"The combination of Siemens and UGS is a clear game-changer in the global PLM industry due to our shared vision of ''Totally Integrated Automation,''" said Tony Affuso, chairman, CEO and president of UGS. "Our customers win through the backing of the long-term security of their system investments provided by one of the world''s largest and most successful and innovative companies. In addition, we are able to provide added value to Siemens'' customers by virtue of being the most practiced PLM provider in open systems, which eases integration with the Siemens technology already in place in all of our key markets."