Schneider Electric nears $20bn PTC deal to link product design to the factory floor

Schneider Electric built its fortune on the unglamorous hardware of electricity: circuit breakers, switchgear and the APC backup batteries that keep servers and home offices running through a power cut. The French group is now close to buying PTC, the American company whose software engineers use to design everything from cars to medical devices, according to the Financial Times and Bloomberg. It would be the largest acquisition Schneider has ever made, and it would put the tools that design a product and the systems that run the plants making it under one owner.

That matters well beyond the two boardrooms. Industrial software is the plumbing of modern manufacturing: the drawings for a car part, the revision history of a pacemaker component and the instructions sent to a production line all live inside programs such as PTC’s Creo and Windchill. Manufacturers that standardise on one vendor rarely switch, because years of designs are locked inside its files and workflows. Every merger among a shrinking group of suppliers leaves the factories that pay for those licences with fewer places to go.

According to the FT, which first reported the talks, Schneider would pay cash in a deal valuing PTC at about $20 billion; Bloomberg, citing a person familiar with the matter, put the figure above that. PTC’s market value stood at roughly $15.6 billion according to LSEG data cited by Reuters, so the reported price implies a substantial premium for its shareholders. Neither company has commented, and the people involved cautioned that the talks could still fall apart.

The approach extends a strategy Schneider has pursued for years. It took full control of the British industrial software group AVEVA in a buyout that valued that business at about £9.5 billion, and agreed this summer to pay $3.1 billion in cash for Cognite, a Norwegian company that builds AI tools for industrial data, which it plans to fold into AVEVA. Chief executive Olivier Blum, a former AVEVA board member, called Cognite “a truly industrial grade AI platform”. PTC would add the design end of that chain: computer-aided design, product lifecycle management and Onshape, its cloud design tool.

For PTC, a sale would cap a period of slimming down. The Boston company sold its Kepware and ThingWorx connectivity businesses to the private equity firm TPG to concentrate on design software and new AI features, then raised its full-year forecasts, guiding to revenue of $2.69 billion to $2.75 billion.

Rivals will read the move closely. Siemens has spent heavily on a portfolio that runs from design to production, including its roughly $10 billion purchase of the simulation company Altair, while Dassault Systèmes, Schneider’s French compatriot and the maker of CATIA and SolidWorks, dominates aerospace and automotive design. Autodesk weighed its own bid for PTC when the company was valued at about $23 billion, then dropped the idea; its own shares had slid by more than 10% once the interest became public.

The deal leaves hard questions open. The reported price is more than seven times PTC’s expected annual revenue, for a business whose market value has fallen by roughly a third since Autodesk circled it. PTC’s customers include manufacturers that buy automation equipment from Schneider’s competitors, and some may question whether design software owned by a hardware supplier stays neutral. Schneider’s own record of absorbing software is uneven: its board replaced the previous chief executive, Peter Herweck, who had come from AVEVA, after about 18 months in the role, in November 2024.

The timetable is short. The FT reported that an announcement could come as soon as Monday, October 5, and any agreement would then need regulatory clearance in the United States and Europe. Cognite, agreed in June, is still awaiting its own approvals and is expected to close within the coming quarters.

Schneider’s best-known product is the beeping battery box under an office desk. If the talks succeed, it will also own the blueprints for much of what the factories it powers actually make.

Tags: mergers and acquisitions, AVEVA, industrial software, Olivier Blum, PTC, Schneider Electric