(Bloomberg) -- Siemens AG has agreed to buy software maker Altair Engineering Inc. for an enterprise value of $10 billion, furthering the German engineering giant’s migration to higher margin, software-driven product lines.

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In its largest-ever acquisition, Siemens will pay Altair investors $113 a share, according to a statement. The transaction, expected to close in the second half of next year, represents a 19% premium to Altair’s Oct. 21 closing price, the last trading day prior to reports regarding a possible acquisition.

The equity value of the Siemens deal is $10.6 billion, according to the statement, which confirmed an earlier report by Bloomberg News that the companies were nearing a deal. Shares of Troy, Michigan-based Altair closed at $108.63 apiece on Wednesday, giving the company a market value of about $9.3 billion.

Led by founder and Chief Executive Officer James Scapa, Altair provides engineering software to companies in the aerospace, automotive, energy and financial services industries. Demand for such tools is expected to grow with the increased adoption of artificial intelligence in everyday life.

Altair fell about 4% after the close of regular trading, which had been halted earlier. Siemens shares declined as much as 1.9% in Frankfurt. The stock is still up more than 4% this year.

In a separate deal, Siemens announced Thursday that it will sell its Airport Logistics Unit to Toyota Industries Corporation’s Vanderlande for €300 million ($326 million).

“Altair is a high-quality asset that makes good strategic sense,” RBC analyst Mark Fielding said in a note, adding that selling the airport logistics unit supports Siemens’s push to become leaner.

What Bloomberg Intelligence says:

Siemens $10 billion acquisition of Altair Engineering adds 8% to its 2023 digital business and appears to be a sensible fit with its Xcelerator software to create an industrial-simulation titan.

- Omid Vaziri, BI Industrials analyst

Siemens Shift

Under CEO Roland Busch, Siemens has been exiting heavy equipment businesses and shifting its focus to software to catch up to the profitability of automation peers like Rockwell Automation Inc. and Schneider Electric SE.

Siemens flagged last November that it could pursue larger acquisitions with a focus on software. In August, Busch said in a Bloomberg TV interview that Siemens was looking for software companies or connected hardware manufacturers whose data can be used in cloud services.