Schneider Electric bets US$22.6 billion on PTC in its biggest deal ever, and investors balk

France’s Schneider Electric has agreed to buy Boston-based industrial software maker PTC for about US$22.6 billion in cash, the largest acquisition in its history, as it pushes deeper into software and artificial intelligence for factories, energy systems and data centres. Schneider will pay US$205 a share, the companies said in a joint release on Monday, a 42.3 per cent premium to PTC’s last closing price before the announcement and 46.1 per cent above its 30-day volume-weighted average.

Including debt, the deal values PTC at an enterprise value of US$23.7 billion, or about €21.1 billion. Both boards approved it unanimously, and PTC’s board recommends that shareholders vote in favour. Closing is expected by the third quarter of 2027, subject to approval by holders of a majority of PTC’s outstanding shares at a special meeting and to regulatory clearances.

Investors split sharply on the price. Schneider shares fell nearly 10 per cent in early Paris trading, erasing close to €15 billion of market value after a 29 per cent gain so far this year, Reuters reported. “AI disruption fears are still weighing on software valuations, which allows acquiring PTC at a decade low valuation but could still weigh on Schneider post deal,” Jefferies said in a note cited by Reuters, while a Berenberg analyst called the valuation healthy given weak sentiment across the software sector. PTC shares climbed as much as 36 per cent on the Nasdaq before closing at US$192.26, still US$12.74 short of the offer price, Insider Monkey reported.

PTC makes computer-aided design, product lifecycle management and related software used to design, build and service complex physical products, and says it serves more than 30,000 customers with over 7,000 employees. It generated €2.4 billion in revenue in calendar 2025 with an adjusted margin of about 40 per cent, according to the release. Schneider, which already owns industrial software company AVEVA and agreed in June to buy AI and industrial data firm Cognite, says adding PTC would lift software and services to an estimated 24 per cent of group revenue and roughly triple the industrial software market it can address.

Chief executive Olivier Blum framed the purchase as a way to link how products are designed with how factories and energy systems run. “The acquisition of PTC represents an important step forward in our ambition to lead the new era of Energy and Industrial Intelligence,” he said, describing the combined business as a “digital thread for the next generation of Industrial AI,” CRN reported. On a call with analysts, Blum said “data is becoming a very critical layer” for getting value from AI, according to Reuters, which noted that Schneider now supplies data centres with everything from cooling units and server racks to power distribution equipment.

Schneider has lined up a fully committed bridge loan from Morgan Stanley and Société Générale for the roughly €22 billion cash cost. It plans to refinance with about €5 billion to €6 billion of new shares, sold through an accelerated bookbuild, and €16 billion to €17 billion of new debt in several currencies. The company said it expects to keep Category A credit ratings and to pause share buybacks in 2027 and 2028, and is targeting €250 million in annual cost savings by the third year along with about €800 million in revenue synergies. It also moved its third-quarter revenue release up to Oct. 16.

PTC president and chief executive Neil Barua said joining Schneider would give the company the scale to expand into more regions and industries. “This all-cash transaction is the culmination of the PTC Board’s commitment to maximize shareholder value,” he said in the release.

This article is for general information only and is not investment advice.

Sources: Schneider Electric and PTC joint release; Reuters via Euronext; CRN; Insider Monkey.