Schneider Electric shares plunge on record $22.6bn PTC deal
French energy technology group Schneider Electric has signed a definitive agreement to acquire Boston-based PTC for $22.6bn (€20.1bn) to expand its industrial AI business. The French company's shares plummeted on Monday following the announcement.
Schneider Electric, a leading European energy technology firm, announced a $22.6 billion acquisition of US-based industrial design software firm PTC. The deal, set to create the world's most comprehensive software and AI powerhouse, will see Schneider pay $205 per PTC share in cash, valuing the company at $22.6 billion and including debt at $23.7 billion.
Schneider aims to leverage PTC's industrial AI capabilities to enhance its industry software offerings, enabling customers to design, manufacture, operate, and maintain products more efficiently. Chief executive Olivier Blum expressed excitement about the acquisition, highlighting how it aligns with Schneider's goal to lead the new era of Energy and Industrial Intelligence.
The deal comes amid growing concerns that AI advancements could disrupt software business models, potentially driving down valuations. In response, analysts at Jefferies warned that the AI disruption theory may continue to impact Schneider's stock price post-deal. Despite this, PTC CEO Neil Barua expressed confidence in the acquisition, stating that it would grant the company substantial scale, resources, and expertise to drive innovation and expand its reach globally.
To finance the acquisition, Schneider plans to issue up to €17 billion in debt and up to €6 billion in new shares. The company anticipates annual cost savings of €250 million within three years of the deal's completion, coupled with around €800 million in additional revenue from the combined businesses. Schneider also intends to temporarily halt share buybacks in 2027 and 2028 before accelerating purchases to finalize its existing €2.5 billion to €3.5 billion program by the end of 2030.
The transaction is expected to close by the third quarter of 2027, pending shareholder approval and regulatory approvals.
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