Acquisition highlights an on-going strategy shift for the German company.
Siemens is to acquire Mentor Graphics for $4.5bn in order to expand its industrial software capabilities.
The German company is set to pay $37.25 a share for Mentor, a US based company that sells software and hardware design automation tools that are meant for the development and testing of electronic systems.
Josef Kaeser, Siemens CEO, said: “It’s a perfect portfolio fit to further expand our digital leadership and set the pace in the industry.”
The German manufacturing giant said that the acquisition will help to supplement its industrial software portfolio along with its offerings in mechanics and software with design, test and simulation of electrical and electronic systems.
The acquisition follows a trend of the company growing its digital business to focus more on industrial applications than consumer-oriented products.
In January Siemens acquired CD-adapco for $970 million, CD-adapco was a privately held engineering software firm that makes computer programs that engineers use to simulate the inner workings of an engine.
In 2014 Siemens spent $7.6bn to acquire Dresser-Rand Group. Dresser-Rand is a maker of compressors and turbines for the oil and gas industry.
Mentor’s last financial results for the six months ended 31st July showed a $10m loss, compared with a profit of $21m in the same period for the year before.
The acquisitions mark a number of changes going on under CEO Kaeser. Last week the company confirmed plans to spin off its healthcare business. The business, which is valued at around £12bn, has been the most profitable part of the Siemens group.
No details have been given as to when the business will be floated, or how much of the business is likely to be floated.
So far markets have responded positively to both the Mentor acquisition announcement and the healthcare business float.
Shares are currently trading at 109.45 euros.