Schneider Electric is paying US$22.6 billion for PTC, and its own shareholders took fright

Schneider Electric, the French maker of electrical and automation equipment, agreed on Monday to buy PTC for US$205 a share in cash. That values the Boston software company at US$22.6 billion, a 42.3% premium to Friday's close of US$144.03.

So what does PTC actually sell? It makes software that manufacturers use to design a product and keep track of it from the drawing board to the scrapheap. The trade calls it product lifecycle management. PTC has more than 30,000 customers and employs over 7,000 people.

PTC closed 33.49% higher at US$192.26. That leaves a gap of almost US$13 to the offer price. The deal is not due to complete until the third quarter of 2027, and it still needs PTC's shareholders and the regulators to approve it.

Chart: Schneider bids US$205 a share for a growing PTC. Revenue by financial year to September, US$m (left scale); year-end share price, US$ (right). The last point is Schneider's offer; Friday closed at US$144.03. — This story’s chart of the day: the numbers, the dark version and the animated version are on its own page. The chart’s page →

Schneider's own shares fell more than 9% in Paris. It will borrow up to €17 billion and sell about €6 billion of new shares to pay for PTC. Share buybacks are on hold for 2027 and 2028.

Chief executive Olivier Blum wants €250 million a year of cost savings by the third year. He is also promising €800 million of extra revenue from selling the two companies' products together.

What to watch

that US$13 gap. If it narrows over the coming months, the market expects the deal to close on time. If it widens, investors are worrying about the regulators or the timetable. I'd take that more seriously than anything either company says.

This story ran in Bids and Ballots Tuesday 6 October’s edition, with the market snapshot, the other two stories, the numbers and the week ahead. Read the whole edition →

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