Siemens has offered $37.25 a share in cash for the Wilsonville, Oregon-based group, a 21% premium over Friday's closing price. The acquisition is part of what the company calls 'Siemen's Vision 2020', in which it identified software as a key growth area and extends its Digital Enterprise Software portfolio.
Siemen's shares rose 1.5% to €110 each by 11:30 CET in Frankfurt, just slightly short of the year high of €110.60 hit on Thursday November 10. Mentor shares were up 19.30% in pre-market trading Monday in New York after ending Friday's session up 1.79% at $30.68.
Mentor makes software for designing semiconductors, offering automation software ranging from integrated circuit and system-on-chip design for automotive electronics as companies continue to scramble for a piece of the self-driving car market.
"With Mentor, we're acquiring an established technology leader with a talented employee base that will allow us to supplement our world-class industrial software portfolio. It will complement our strong offering in mechanics and software with design, test and simulation of electrical and electronic systems," said Klaus Helmrich, member of the Managing Board of Siemens.
Mentor's electronics integrated circuits and systems design, simulation and manufacturing solutions are "essential for today's smart connected products such as autonomous vehicles," the company said in a statement.
Activist shareholder Elliott Management has supported the transaction. In late September, Elliott revealed it had upped its stake of Mentor to 8.1%, saying it had initiated dialogue with the board about operational opportunities, including enhancing efficiency and revenue quality, and strategic opportunities for Mentor that would improve shareholder value.