"With the acquisition, Siemens strengthens its position as a leading technology company and its leadership role in industrial software," the Munich-based group said in a statement.
Siemens, whose sprawling global business has long been a producer of heavy industrial equipment, has in recent years sought to shift its focus towards digital technology and factory automation.
"Altair's competencies in simulation, high-performance computing, data science and artificial intelligence" will boost the company's reach into AI and simulation, Siemens CEO Roland Busch said.
The digital industry division, which includes software for industry and factory automation, has become the driving force behind the group's growth in recent years.
The acquisition "will create the world's most comprehensive AI-powered design and simulation portfolio", Busch said.
Altair shareholders will receive $113 per share, representing an enterprise value of approximately $10 billion, the statement said.
The transaction is expected to increase Siemens' digital business revenue by 8 percent and increase the digital business revenue reported in the 2023 fiscal year by around $650 million.
Altair Engineering, founded in 1985, went public on the Nasdaq stock exchange in 2017.
The company is headquartered in the US state of Michigan and employs more than 3,500 people, compared with Siemens' 320,000 employees worldwide.
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