With its acquisition of US software producer UGS Corp, of Plano, Texas, the Siemens Automation and Drives (A&D) Group will expand its product spectrum in automation technology to include industrial software for planning, design and simulation in Product Lifecycle Management (PLM).

Siemens said that its A&D unit will now be able to offer its customers worldwide solutions for creating digital factories.

The purchase price for the deal is around US$3.5bn 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 move, Siemens said, would give SV the necessary financial resources and greater entrepreneurial flexibility for ensuring further sustainable and profitable growth.

“With the acquisition of UGS, we can 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 this unique combination, we will underscore our position as a trendsetter in automation systems and propel this business into a new dimension,” said Klaus Kleinfeld, President and CEO of Siemens AG.

With sales of EUR10bn in the past fiscal year, SV is one of the largest and most successful Siemens Groups.

“An IPO would give SV greater flexibility, further reinforce its strong position in the market for automotive electronics, and actively tap the market consolidation opportunities for its growth,” stated Kleinfeld.

See also: GERMANY: Continental eyes Siemens VDO stake