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It’s a Big Deal: Industrial Automation Acquisitions, Strategic Growth & Diversification

Nov. 19, 2024

Analysts anticipate a surge in global M&A transactions across robotics, process and control systems automation and manufacturing.

Rehana Begg

The news that Siemens AG acquired Altair Engineering Inc. was not as much a surprise as it was a flashback.

Earlier this year at Hannover Messe, Germany, a visit to Altair’s booth got me thinking about how their computational science and AI solutions might really give Siemens a run for its money.

Little did I know that the two companies were already in deep discussions. The $10.6 billion deal signed in October was designed to solidify the German industrial conglomerate’s trajectory towards higher margin, software-driven product lines.

The acquisition is a significant one for Siemens, which has progressively evolved beyond its traditional industrial customers by boosting its digital offering. “The addition of Altair’s capabilities in simulation, high-performance computing, data science and artificial intelligence together with Siemens Xcelerator will create the world’s most complete AI-powered design and simulation portfolio,” said Roland Busch, president and CEO of Siemens AG.

But if the endgame for Siemens, as some analysts argue, is to transform into a leaner world leader in industrial-automation software and smart infrastructure, this acquisition is merely a milepost.

As we head towards 2025, technology-driven deals are at the forefront and likely will continue to have a ripple effect in the number of mergers and acquisitions expected this year. The emphasis is squarely on AI, machine learning and other emerging technologies. The Siemens/Altair merger comes as demand for digital twin and simulation technology continues to grow.

Strategic Acquisitions Maximize Value Creation

Forward-thinking companies pursue acquisitions to capture the advantage of scale. The challenge for them is finding the best niche options and the ideal sequence to maximize value creation.

Hinging on Merger Endgame Theory, blue-chip companies across industries—ranging from BMW, Swatch, Ducati and Red Bull to Porsche and KPMG—have all historically embarked on similar global consolidation strategies, showing how they were either dominated or surmounted when attempting to leverage special competencies to achieve a competitive edge while increasing their market share.

Other big deals this year include chip design toolmaker Synopsys’s $33.6 billion purchase of Ansys, conspicuous for its AI-augmented simulation software. Hewlett Packard Enterprise’s $14.3 billion purchase of Juniper Networks feeds into a strategy of enabling faster communication between servers.

And let’s not forget the stealth of the “Magnificent Seven!” These companies—Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA and Tesla—are at the bleeding edge of AI, EV, cloud computing infrastructure and digital transformation. One deal of note for chipmaker NVIDIA was the closing of a $675 million transaction with AI startup Figure AI in February 2024. Founded in 2022, Figure AI is in the process of commercializing industrial humanoid robots to address labor shortages.

Homing in specifically on domestic industrial automation solutions, a rush of M&A activity in Q3 2024 can be connected to demand for software-based automation solutions. According to advisory firm Blue River Financial Group, Acieta expanded its material handling, testing and control systems capabilities with the acquisition of Capital Industries; Motion & Control Enterprises acquired Air Automation Engineering to strengthen its geographic reach; THK Group acquired Liberty Robotics, effectively bolstering strategic growth in 3D vision at the same time as it expanded across automotive, packaging and logistics industries; The Timken Company acquired CGI to bolster its capabilities and product offerings; and Kubota acquired Bloomfield Robotics, further leveraging its crop monitoring technologies.

Blue River’s analysts expect middle-market M&A activity to pick back up once we enter 2025. When all is said and done, the best course of action for strategists will depend not only on economic resilience, the interest rate regime and political uncertainty, but the true test of their success will also depend on their style of execution.

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About the Author

Rehana Begg | Editor-in-Chief, Machine Design

As Machine Design’s content lead, Rehana Begg is tasked with elevating the voice of the design and multi-disciplinary engineer in the face of digital transformation and engineering innovation. Begg has more than 24 years of editorial experience and has spent the past decade in the trenches of industrial manufacturing, focusing on new technologies, manufacturing innovation and business. Her B2B career has taken her from corporate boardrooms to plant floors and underground mining stopes, covering everything from automation & IIoT, robotics, mechanical design and additive manufacturing to plant operations, maintenance, reliability and continuous improvement. Begg holds an MBA, a Master of Journalism degree, and a BA (Hons.) in Political Science. She is committed to lifelong learning and feeds her passion for innovation in publishing, transparent science and clear communication by attending relevant conferences and seminars/workshops.

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