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Siemens A&D acquires software producer UGS for US$3.5 billion – IPO for Siemens VDO Automotive planned


Munich, Jan 25, 2007

With its acquisition of U.S. 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). As a trendsetter in industrial automation, A&D will now be able to offer its customers worldwide solutions for creating digital factories. The purchase price for the deal is around US$3.5 billion 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 would give SV the necessary financial resources and greater entrepreneurial flexibility for ensuring further sustainable and profitable growth.

UGS generated just under US$1.2 billion in sales and an EBITDA of US$241 million in fiscal 2005. The company is one of the world’s market leaders for Product Lifecycle Management (PLM), a critical part of industrial manufacturing that allows the digital control of product development and manufacture. The market for PLM software and services has an annual volume of around US$13 billion and growth rates between 7 and 9 percent. Combining the PLM solutions of UGS with Siemens’ automation technology will enable Siemens to provide integrated offerings covering the entire product life-cycle for the first time. Siemens is thus the first company in the world able to offer its customers fully integrated solutions for creating digital factories that will give the customers decisive competitive advantages through reduced costs and improved quality assurance.

“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. A&D and UGS, two world-class companies which have successfully worked together in the past, will join forces and generate substantial growth synergies.

At the same time, Siemens plans an initial public offering (IPO) of SV. With sales of €10 billion in the past fiscal year, SV is one of the largest and most successful Siemens Groups. Since being established at Siemens more than 20 years ago, the automotive Group has rapidly grown an average of ten percent a year through organic growth and acquisitions. SV met its margin target set as part of Operation 2003 and has continued to improve its profitability in a challenging competitive environment. “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. The expansion of the very successful and profitable, yet capital-intensive business of SV has long been the subject of intensive discussion at Siemens. “We are convinced that a listing of SV would be a highly attractive option for continuing to drive the further expansion of SV. This would write a new chapter in the SV success story and open up enormous future opportunities for the company and its employees,” said Kleinfeld. Preparations for the IPO will be initiated immediately. Further details have not yet been finalized.

The Siemens Automation and Drives Group (A&D), Nuremberg, Germany, is the leading manufacturer in this field worldwide. Products supplied by A&D include standard products for the manufacturing and process industries and for the electrical installation industry as well as system solutions, for example for machine tools, and solutions for whole industries such as the automation of entire automobile factories or chemical plants. Supplementing this range of products and services, A&D also offers software for linking production and management (horizontal and vertical IT integration) and for optimizing production processes. A&D employs around 70,600 people worldwide and in fiscal year 2006 (to September 30) earned a Group profit (based on US GAAP) of €1.572 billion on sales of €12.848 billion, and posted orders of €14,108 billion.

Siemens VDO Automotive, a Group of Siemens AG, is one of the world’s leading suppliers of electronics and mechatronics for the automotive industry. With its products, it enables individual mobility and the efficient transportation of goods by road in modern societies. As development partner of the automotive industry, the company manufactures automotive electronics and mechatronics for reducing emissions, enhancing safety and driving comfort, and keeping drivers informed and in touch with the outside world. Siemens VDO generated sales of over €10 billion in fiscal year 2006 (to September 30) and Group profit of €669 million (based on US GAAP).

Siemens (Berlin and Munich) is a global powerhouse in electrical engineering and electronics. The company has around 475,000 employees (including “discontinued operations”) working to develop and manufacture products, design and install complex systems and projects, and tailor a wide range of services for individual requirements. Siemens provides innovative technologies and comprehensive know-how to benefit customers in 190 countries. Founded more than 155 years ago, the company focuses on the areas of Information and Communications, Automation and Control, Power, Transportation, Medical, and Lighting. In fiscal 2006 (ended September 30), according to US GAAP, Siemens had sales of €87.3 billion and net income of €3.033 billion. Further information is available on the Internet at:
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