PTC and Rockwell Automation, in a joint statement today in response to a research report published by Berenberg Capital Markets, have denied important parts of what is in the report. Among other things, PTC and Rockwell state that the report incorrectly wrote that Rockwell "cuts off its financial ties with PTC" and that "it was announced yesterday that Rockwell will sell its entire stake, an 8.98 percent stake in PTC."

Both allegations are incorrect, and Berenberg has issued a revocation following its initial report. Rockwell has not made any announcement that they are "cutting financial ties with PTC" or that they are selling their entire investment in PTC.

On the contrary, PTC and Rockwell state in their response, the parties continue to provide value-added solutions to manufacturing customers through their strategic alliance. Moreover, Rockwell’s CEO Blake Moret, during Rockwell’s investor day on November 10th, said that the relationship between Rockwell and the PTC is as "strong as ever" and that he intended to remain on PTC's board.

Blake Moret, CEO of Rockwell Automation (left) and Jim Heppelmann, CEO of PTC (right) deny that "the financial ties between the companies" were about to be cut, as written in a Berenberg Capital Markets report.

A brief background is that PTC and Rockwell have been partners in a strategic alliance agreement since 2018. In connection with this agreement, Rockwell made an investment of approximately $1 billion in PTC.

Among other things, the purchase agreement means that Rockwell would have the flexibility to sell its PTC shares, but subject to certain volume and time restrictions. According to the purchase agreement, Rockwell also has the right to appoint a representative to PTC's board as long as Rockwell has a shareholding of at least 5 percent in PTC.

Within the framework of their partnership, PTC and Rockwell have developed packages that link PTC's capabilities in terms of PLM and Operational Technology (OT)-related software with Rockwell's automation solutions—which is a basic prerequisite for being able to create platforms that can compete with market-leading Siemens Digital Industries. The partnership looks very successful from this perspective.

Within the framework of their partnership, PTC and Rockwell have developed packages that link PTC's capabilities in terms of PLM and OT-related software with Rockwell's automation solutions—which is a basic prerequisite for being able to create platforms that can compete with tough competitor Siemens Digital Industries. The partnership looks very successful from this perspective.

The Partnership is a Prerequisite to Compete Effectively with Siemens

There are, of course, a number of complex regulatory documents surrounding the agreement between the companies, including the fact that Rockwell has the right to sell PTC shares. This can be done, and in a document submitted on November 8, 2021, Rockwell stated its intention to sell some of its shares in PTC shares under certain market conditions in accordance with the restrictions in the securities purchase agreement.

This, however, is far from tantamount to cutting financial ties. There may be other, more pecuniary reasons why Rockwell needs or wants to sell some of its shares.

Contrary to the idea of an impending separation, the cooperation and partnership between the companies seems to be stronger than ever. The mutual benefit of maintaining and developing packages where PTC's capabilities in PLM and OT-related software are linked to Rockwell's automation solutions is a prerequisite for being able to create platforms that can compete with Siemens Digital Industries. This is something in which, according to several analyst reports, the partnership has succeeded very well.