Schneider Electric has agreed to buy PTC, the Boston-based software company, for around $22.6bn in the largest acquisition in the French group’s history. The deal is designed to expand Schneider’s industrial software and AI business as demand for data centres continues to surge.
Investors were not convinced at first. Schneider’s shares fell nearly 10% in early trading in Paris on Monday, wiping close to €15bn ($17bn) off its market value after a 29% rise in the year to Friday’s close. Shareholders weighed the size of the purchase, the premium on offer and the outlook for software valuations given uncertainty over AI. PTC shares, by contrast, jumped 34.4% in US premarket trading. Jefferies said fears of AI disruption had allowed Schneider to buy PTC at a valuation not seen in a decade, but warned the same worries could weigh on Schneider after the deal. Berenberg analyst Nay Soe Naing said the price looked healthy given weak sentiment across the software sector.
Schneider is offering $205 a share, a 42.3% premium to PTC’s last closing price, giving an enterprise value of $23.7bn. It plans to fund the purchase with €5bn to €6bn of new shares, issued under an existing shareholder authorisation, and €16bn to €17bn of new debt. The group expects €250m of annual run-rate cost savings by the third year after completion, plus around €800m in revenue synergies. According to LSEG data, it ranks among the largest deals in Europe this year. Completion is expected by the third quarter of 2027, subject to approval from PTC shareholders and regulators.
Once best known for fuses and circuit breakers, Schneider now supplies much of the physical backbone of data centres, from cooling units and server racks to power distribution equipment. PTC adds software used to design, manufacture and service products across many industries. Chief executive Olivier Blum told investors that PTC’s engineering and design data would help Schneider deploy AI across customers’ industrial operations, describing data as “a very critical layer” in getting value from the technology.
Blum said the combined group would earn about 24% of its revenue from software as a service, moving it further towards recurring income and away from its roots in electrical equipment and automation. Data centre demand, particularly in the US, has been driving Schneider’s earnings and helping to offset weakness in some traditional equipment markets. The PTC deal follows Schneider’s agreement in June to buy Cognite Holding, a privately held provider of AI software and industrial data.
