BUZZ - Schneider Electric's shares plunge after announcing a $22.6 billion acquisition of PTC

October 5 - ** Schneider Electric (SCHN.PA) shares fell 8% following a deal (link) to acquire PTC (PTC.O) in an all-cash transaction, valuing the US software company at approximately $22.6 billion

** Schneider will acquire PTC shares at $205 per share; financing for the deal will be raised through a combination of equity and debt issuance

** Analysts unanimously agree that the rationale for the deal is obvious, but also point out concerns related to artificial intelligence

** Royal Bank of Canada (RBC) stated that the deal's valuation multiples are reasonable, but it will intensify Schneider's exposure to AI-related risks in the pressured industrial software assets sector

** Jefferies agreed: it is these concerns that have led to the deal being struck at the lowest valuation in a decade, which may weigh on the stock price after the transaction is completed

** "The integration process may be more complex, and the market may therefore re-examine capital allocation issues," RBC added

** Baird stated that as Schneider bets big on providing infrastructure for data centers, the merged entity of PTC and Schneider will create a "giant" in the field of industrial data management

** As of the close of the previous trading day, Schneider Electric shares were up 29% year-to-date​

(1 US dollar = 0.8938 euro)

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