Siemens A&D acquires UGS for $3.5 billion; IPO for Siemens VDO Automotive

27 January 2007

As a pioneer in industrial automation, A&D will now be able to offer its customers worldwide solutions for creating digital factories. The purchase price for the deal is around $3.5 billion including debt. The transaction is subject to approval by the relevant authorities.

In addition, Siemens AG plans an IPO of its automotive supply business Siemens VDO Automotive (SV), in which Siemens would hold a majority stake. This would provide SV the necessary financial resources and greater entrepreneurial flexibility for ensuring further sustainable and profitable growth.

UGS generated just under $1.2 billion in sales and an EBITDA of $241 million in fiscal 2005. The company is one of the world's market leaders for PLM, a critical part of industrial manufacturing that allows the digital control of product development and manufacture.

The market for PLM software and services has an annual volume of around $13 billion and growth rates between 7 and 9 per cent. Combining the PLM solutions of UGS with Siemens' automation technology will enable Siemens to provide integrated offerings covering the entire product life cycle for the first time.

Siemens thus becomes the first company in the world able to offer its customers fully integrated solutions for creating digital factories that will give the customers decisive competitive advantages through reduced costs and improved quality assurance.

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