ABB ABB Ltd

MUNICH—Siemens AG said it would reshuffle management and hire a Cisco Systems Inc. executive as part of an effort to expand its software capabilities.

The changes, announced late Wednesday, mark the latest attempt by Chief Executive Joe Kaeser to centralize control and reshape the German industrial giant around digitization.

Siemens said it had recruited Cedrik Neike from U.S. technology group Cisco to join its management board to "strengthen digital expertise" at the top of the company. Siemens also appointed current managing board member Roland Busch to be the group's new chief technology officer.

The changes create a "very stable basis in management" and underscore that the company has finally turned the page on a "difficult time" that included years of lagging profitability and corruption scandals, said a person familiar with management deliberations.

Since taking over the top job three years ago in a boardroom coup, Mr. Kaeser has presided over a comprehensive restructuring that has included strict cost saving measures and thousands of job cuts. He has also moved to streamline the company's former wide range of businesses around the areas of electrification, digitization and automation.

As part of that effort, Siemens last month announced a planned agreement to acquire automation- and industrial-software provider Mentor Graphics Corp. in a deal that gives the U.S. firm an equity value of around $4 billion.

The acquisition is meant to give Siemens an edge in mechanical and electrical simulation over rivals such as Zurich-based ABB Group, according to the person close to the management board.

The deal, which the company expects to close in the second quarter of next year, is likely to be Siemens' final major acquisition in its effort to erect a "digital house" around the "new Siemens," this person said.

Earlier this year, Siemens acquired U.S.-based simulation software provider CD-adapco, in a deal valued at roughly $1 billion.

Mr. Kaeser has argued that Siemens' competitive advantage is its ability to apply its software and automation capabilities to its own industrial business areas such as oil and gas, while also digitizing the production processes of its diverse customer base.

Siemens has been a leader in the so-called Industrial Internet, a global effort to marry manufacturing with the Internet of Things. The endeavor aims to increase production efficiency by developing smart factories in which robotic machines share data over the web, while also enabling greater product customization on the shop floor.

Siemens and competitors, including General Electric Co. and Robert Bosch GmbH, have been working on digitizing their own manufacturing processes and developing software platforms and automation tools to sell to other industrial players.

The company also announced the appointment of E.ON SE Chief Financial Officer Michael Sen to the managing board. Mr. Sen will be responsible for the company's lucrative health care division, which Mr. Kaeser has said he plans to spin off.

American, Lisa Davis, who currently sits on the management board and runs Siemens's energy operations out of Houston, has been appointed CEO of the company's entire U.S. operations, Siemens said.

Write to Christopher Alessi at christopher.alessi@wsj.com

(END) Dow Jones Newswires

December 01, 2016 09:05 ET (14:05 GMT)

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