French industrial giant Schneider Electric has agreed to acquire U.S. industrial software provider PTC Inc. in an all-cash transaction valuing the company’s equity at approximately $22.6 billion.

Under the terms of the agreement, the largest deal in the French group’s history, Schneider will pay $205 per share for Boston-based PTC — a 42% premium over its last closing price of $144.03. Including debt and other liabilities, the transaction carries an enterprise value of $23.7 billion.

The deal is expected to close in the third quarter of 2027, financed through a mix of existing equity and new debt.

The landmark acquisition accelerates Schneider’s strategic pivot from traditional hardware manufacturer to a comprehensive digital and industrial software ecosystem.

PTC specializes in computer-aided design (CAD), product lifecycle management (PLM), and Internet of Things (IoT) software, enabling manufacturers to digitize product creation, engineering, and service lifecycle tracking.

Schneider plans to pair PTC’s design and lifecycle software with its existing software assets, including AVEVA and its recently announced acquisition of Cognite Holding, to create an integrated, artificial intelligence (AI)-driven platform for industrial operations, engineering, and data management.

“Large-scale M&A is typically unwelcome in the first instance by European investors, although Schneider Electric’s deals have typically proven strategically astute, if debatable from a valuation standpoint,” J.P. Morgan analysts noted in a client update.

Schneider is buying more than software revenue; it is buying product context, said Stephanie Walter, practice leader for AI Stack & Enterprise Application Development at HyperFRAME Research.

“PTC’s engineering and lifecycle data can tell an AI system what an industrial asset is, how it was designed, which components it contains, and how it is supposed to behave,” Walter said. “Combined with Schneider’s energy and automation footprint and the operational data in AVEVA and Cognite, that could connect product design with what happens in the factory and later in the field.”

“The strategy makes sense,” she added. “Execution will be harder. Customers will gain little if PTC, AVEVA, Cognite, and Schneider’s infrastructure remain separate products with different data models, permissions, and workflows. Schneider must make that information work together without creating another major integration project for customers. If it can, industrial AI could make better decisions because it understands both how an asset was designed and how it is performing.”

Shares of Schneider dipped 5% in pre-market trading on Tradegate following the news, reflecting market concerns regarding the high deal premium and valuation headwinds facing software businesses amid broader AI disruption.

Despite initial market hesitation, Schneider project management expects the transaction to deliver significant financial return. The integration is forecasted to generate €250 million ($273 million) in annual run-rate cost savings by the third-year post-closing, along with roughly €800 million ($895 million) in revenue synergies. The company anticipates the deal will be immediately accretive to adjusted earnings per share (excluding purchase price accounting) in its first full consolidated year.

The mega-deal underscores Schneider’s expanding focus on software and data center infrastructure.

Driven by surging demand for AI capabilities, Schneider has become a key infrastructure supplier for major data centers, offering high-efficiency power distribution and advanced cooling solutions to balance weakness in traditional electrical-equipment sectors.

Alongside the PTC transaction, Schneider announced a conditional public offer to acquire Bulgarian smart-home device maker Shelly Group for €70 per share, valuing the company at approximately €1.27 billion ($1.39 billion). That offer remains subject to regulatory clearance and securing at least 95% of Shelly’s outstanding shares.