Schneider Electric to buy US software firm PTC for $22.6 billion

French energy and software group Schneider Electric said Monday that it would buy PTC, a US-based maker of software for industrial clients, for $22.6 billion in cash.

The move comes as software companies are racing to secure revenue streams amid fears that artificial intelligence advances will increasingly compete against their services at lower costs.

Schneider, which makes equipment for energy systems such as data centre cooling, also offers product management software, while PTC specialises in computer aided design and other industrial processes.

The deal "creates a leading, scaled, open and interoperable industrial software and AI franchise", Schneider said in a statement, adding that PTC's board had agreed to a deal that represents a 42 percent premium to its most recent share price.

"We gain substantial scale and resources to accelerate innovation, advance our Intelligent Product Lifecycle vision, and expand our business into more geographies and end markets to serve more customers," PTC's chief executive Neil Barua said in the statement.

The Boston-based company has around 7,000 employees and counts 30,000 clients, and generates roughly half of its revenues in the Americas.

Schneider will take on up to 17 billion euros ($19 billion) in debt and issue up to six billion euros in new shares to pay for the deal.

That weighed on Schneider's share price, which was down more than eight percent in early Paris stock exchange deals.

"AI disruption fears are still weighing on software valuations, which allows acquiring PTC at a decade-low valuation," analysts at Jeffries said in a research note.

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