By Natascha Divac

FRANKFURT-- Siemens AG agreed to acquire Mentor Graphics Corp in a multibillion-dollar move by the German industrial giant to expand its automation-software business.

Siemens said on Monday it offered $37.25 a share in cash, equivalent to a 21% premium to Mentor's closing price on Friday and valuing the U.S. company at $4.5 billion including debt.

Wilsonville, Ore.-based Mentor sells software and hardware design-automation tools for the development and testing of advanced electronic systems.

"It's a perfect portfolio fit to further expand our digital leadership and set the pace in the industry," said Siemens Chief Executive Joe Kaeser.

Mentor had over 5,700 employees at its fiscal year-end Jan. 31. The firm generated revenue of approximately $1.2 billion with an adjusted operating margin of 20.2%. Last month, Mentor reported lower earnings and revenue for the latest quarter.

Mentor shareholder Elliott Management, which last month increased its stake in the electronics design company to 8.1%, has committed to support the transaction, the company said.

Write to Natascha Divac at natascha.divac@wsj.com

(END) Dow Jones Newswires

November 14, 2016 03:35 ET (08:35 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.