Market Price and Future Price

I. The Formula

Germany's transfer of industrial substance follows a formula that fits into two sentences: The Germans sell at market prices and buy at future prices. When the reckoning of these deals is drawn, those responsible are no longer in office. The first sentence describes a balance-sheet asymmetry. The second, a temporal one. Together they describe an incentive architecture in which the decisions that dissolve a country's substance most quickly remain individually rational, collectively disastrous, and personally unpunished. Once one has read the formula, one sees it everywhere — at Bayer-Monsanto, at Daimler-Chrysler, at ThyssenKrupp-Steel, at the Chinese joint ventures of the 1990s. But it has one current case that displays it in pure form: the sale of the Siemens Innomotics division to KPS Capital Partners in autumn 2024.

The case is the concrete continuation of what Spectator in One's Own House described anthropologically in January 2026: the German industrial manager who smiles alongside American chip billionaires on the CES stage while at home a startup is fighting alone for its survival. What that essay showed psychologically — the role of the supplicant who takes himself for a shaper — has been carried out economically in the Innomotics deal. Roland Busch, Chairman of the Executive Board of Siemens, signed in 2024 what was performatively repeated on the Las Vegas stage in 2026: the transfer of one's own substance to a buyer who takes over the future exploitation, while the seller retains the rights to the past.

II. The Deal

On 16 May 2024, Siemens announced the sale of Innomotics to KPS Capital Partners. It closed on 1 October 2024. Enterprise value: 3.5 billion euros for a company with 3.3 billion euros in annual revenue, 15,000 employees, and seventeen factories in 49 countries. Operational headquarters: Nuremberg. Portfolio: low-voltage motors, high-voltage motors, medium-voltage drives — the complete industrial drive technology on which Werner von Siemens founded his company in 1866, and which had remained inside the company for 158 years.

The buyer is no chance financial investor. Since 2020, KPS Capital Partners of New York has bought seventeen companies for more than 11.5 billion dollars out of German, Belgian, Italian, Irish, Norwegian, Swiss and British corporate sellers — a systematic acquisition programme against European industrial-goods substance. Their portfolio companies together generate 19.3 billion dollars in annual revenue and operate 219 production sites in 26 countries. This is not a portfolio of loose participations. It is an American parallel conglomerate assembled from European industrial assets, built out of what European corporations have declared no longer core.

In the buyer's press release stands a sentence one should read twice. Michael Psaros, co-founder and co-managing partner of KPS: We thank Siemens for entrusting KPS with its iconic heritage business created by Werner von Siemens. The New York private equity manager thanks the German corporate board for having entrusted him with the heritage of the company's founder. This thanks is not politeness. It is economically precise. In the next paragraph Psaros formulates what KPS sees in Innomotics: In many ways, KPS is investing in the future of the 21st Century through Innomotics. The Company is well-positioned to capitalize on the global megatrends of electrification, energy efficiency, digitalization, urbanization and the commercialization of new energy resources.

Five megatrends. A thirty-year growth horizon. That is the American reading. The German reading, from the pen of Ralf Thomas, CFO of Siemens: I am pleased that with the sale of Innomotics to KPS we have taken another important step in optimizing our portfolio. Portfolio optimisation. The language in which the transfer of substance describes itself is an administrative language.

III. The Two Valuation Logics

The price for Innomotics — 3.5 billion euros against 3.3 billion in revenue — corresponds to a valuation multiple of 1.06 times annual revenue. This is the market price for industrial hardware on the current capital market. It is not miscalculated; it is the standard valuation for a margin-solid, moderately growing industrial-goods segment. But it is exclusively backward-oriented: it prices what Innomotics is, not what it will be in a decade of electrification.

In the same fiscal year, Siemens bought two software companies. Altair Engineering, simulation and optimisation software, for 10.6 billion dollars against approximately 700 million in revenue — roughly fifteen times revenue. Dotmatics, life-sciences research software, for 5.1 billion dollars. Together, about 15 billion dollars for two companies with under one billion in revenue combined. The valuation multiple: about fifteen to seventeen times. This is the future price. It presupposes a market architecture in which software providers with high switching costs, network effects, and recurring revenues deliver stable returns over ten to fifteen years.

The valuation gap — factor 1 against factor 15 — tells everything about the power differential between hardware and software on the current capital market. But it says nothing about real value creation in thirty years. The one valuation is the price the market pays today for a thing that has worked for 150 years. The other is the price the market pays today for an expectation resting on the continuation of a market architecture whose foundations are currently dissolving under AI conditions. Whoever trades the one for the other has, on paper, no choice. Whoever asks strategically sees the calculation differently. The relation between market price and future price is not the price of action but its inversion: the durable is sold, the fragile is bought, in the name of the future.

IV. Why do the Americans buy?

When a buyer who operates professionally and with systematic success in the market wants to hold a thing for years, he sees a value that the seller does not see or cannot appreciate. The reason for the value differential is the interesting quantity, not the price. In the case of Innomotics, the reason is identifiable: KPS believes in electrification as a decade-long megatheme and knows that the German substance sits exactly at this point. Motors, drives, converters — this is the craft of electrification. Heat pumps need compressors. Wind turbines need generators. Electric mobility needs drivetrains. Hydrogen needs compressors and electrolysis drives. Mining — which is becoming important again with critical raw materials — needs large motors. All these growth markets share one foundation: the ability to translate electrical energy into mechanical motion and back. Precisely there sits Innomotics.

KPS will not hold Innomotics forever. The American private equity model is designed for five to seven years. The final buyer will be someone else — an American industrial conglomerate, a Chinese strategic buyer, an IPO in New York. But the structure of the American grip on European industrial goods is designed for twenty, thirty years: a catch-net of private equity, then strategic buyers, then the exchange. Each stage sells on at a mark-up. The Germans sell once, and then it is gone. The Americans exploit the same substance in three consecutive value-creation stages. That is the real difference.

It is not that the Americans are cleverer. They think more systematically. A private equity fund has a five-to-seven-year holding period, but the fund of funds behind it has twenty years, and the endowment behind that has thirty. The chain of successive owners thinks in stages, in which each stage is rational for its own time and the sum of the stages remains coherent over the long term. The German corporate decision knows no such chain. It sells, and the proceeds disappear into the balance sheet. What becomes of the sold thing no longer concerns the seller.

The irony sits in the address. The electrification that Siemens names in its strategy as a future theme — we profit from the megatrends of electrification and decarbonisation — takes place in Nuremberg, in the plant that Siemens has just sold. On it now sits KPS. If in ten years the heat pump, electric mobility, industrial electrification, wind power, hydrogen compressors — the entire real electrification industry — takes off as expected, then not Siemens earns from the matter but the American interim owner and the next buyer after him. Siemens earns instead from the Altair software that simulates and optimises the electrification installations of others. Economically not unwise. In substance terms: the exploitation of one's own past, whose future yield flows abroad.

V. The Erosion Path of What Was Bought

What is sold on the one side has physical durability. An electric motor that Innomotics builds in 2024 is still an electric motor in 2054. The physics of magnetostatics, reluctance, copper winding, statics in the rotor do not change. What the motor can do in 2054 it can also do when the manufacturing robots that assemble it have been replaced thirty years hence by others. Physical substance ages slowly.

What is bought on the other side has a different durability. Altair Engineering is simulation software — finite-element methods, fluid dynamics, topology optimisation, a field in which the value of the software lies not in a physical principle but in a codebase compiled over decades and anchored in customer routines. Precisely this anchoring is what justifies the fifteen-fold multiples: high switching costs, long-term customer retention, recurring licence revenues. And precisely this anchoring is what is eroding under AI-driven software development.

What an established provider like Altair has built with five hundred developers over ten years can be delivered by a young competitor with a well-built AI development team today in eighteen to twenty-four months. This is not a forecast — it is already observation. Cursor, Windsurf, Anthropic Claude Code, GitHub Copilot: the tools that make a capable developer five- to ten-fold more productive are already standard. The lead an established provider had through years of codebase is melting faster than its amortisation had budgeted for. If a competitor builds its simulation software, its PLM platform, its design suite with a better AI architecture, it can overtake the established product in two iterations.

The recent reference case sits on the field of AI models themselves: when the Chinese startup DeepSeek showed at the beginning of 2025 that a GPT-4-like model can be trained for a fraction of what had been assumed, OpenAI, Anthropic, but especially also Microsoft and Nvidia together lost several hundred billion dollars in market capitalisation within a few days — not because their models had become worse but because the assumption of lead-safety broke. This movement — a competitor whose AI is suddenly better makes the others look old — took place in 2025 in the foundation-model space. It will spread into the application space (industrial software, PLM, simulation) in the coming years. If we calculate Altair's classical valuation with the assumptions of 2020, we arrive at ten billion. If we run the same calculation with an AI-adjusted erosion scenario — say, thirty per cent market share loss to new competitors over ten years, twenty per cent price pressure from lower competitor costs — we arrive at four to five.

VI. The Time Lag

Which brings us to the second sentence of the formula. When the reckoning of these deals is drawn, those responsible are no longer in office. This is no polemical sharpening. It is the load-bearing column of the pattern. Roland Busch signed the Innomotics sale in 2024. His contract runs initially until 2028; likely it will be extended, but by the early 2030s at the latest he will either move to the supervisory board or retire. When in 2035 it becomes visible that Altair has eroded under AI pressure, that Innomotics has meanwhile been resold at four times the price to a Chinese strategic buyer, and that German drive technology hangs on a Chinese-American value chain, Busch will long since have booked his bonuses and will be asked by a successor how this could have happened at all. It is no conspiracy. It is an incentive asymmetry.

The capital market applauds the sale and the acquisition today. Share prices rise. Bonuses are paid out. Analyst reports praise portfolio focus. This reward is timely and personally attributable. The consequence — the long-term substance loss — is time-distant and diffusely attributable. It falls on no one who signs today. The incentive architecture rewards exactly those actions whose consequence becomes visible only when those responsible have become unassailable.

The essay What Is Still German carried this pattern through five layers of industrial substance in April 2026 and closed with the sentence: These actors do not act in bad faith. They act rationally within the optimisation conditions they find. The open point that this essay did not further treat is the question why the optimisation conditions are so built that those responsible no longer need to see their own reckoning. The answer stands in the formula: because reward and consequence are temporally decoupled. The sale is celebrated today. The reckoning is drawn in 2035. Until then, personnel change, forgetting, and the next portfolio focus are stronger forces than memory.

VII. The Five-Layer Test

The five-layer model — legal, financial, operational, cultural, strategic — was developed in the April essay at the example of Volkswagen. At Innomotics one can walk through it at a glance, and the glance shows that the erosion takes place here simultaneously on all five layers — faster and more completely than at VW, because the transition happens through a single contract, not in a creeping displacement.

Legally: Innomotics is today a German GmbH with its seat in Nuremberg, but wholly owned by a New York holding company. The German legal form remains; the ownership chain ends in Delaware. Financially: The cash flow goes to KPS and its fund investors, predominantly American pension funds, endowments, family offices. The German corporation and its German shareholders receive the one-time sale proceeds and no share in further value development. Operationally: The factories remain, for now, where they are — seventeen sites, of which the operational headquarters is Nuremberg. But investment, research and location decisions now lie with an owner whose optimisation goal is a resale in five to seven years. Rationalisations to improve margins are likely; growth investments will be made where they most raise the resale price, not where the historical competence sits.

Culturally: The company language becomes English, reporting lines run to New York, reporting follows US private equity standards. Board meetings are no longer German board meetings. Strategically: Innomotics no longer acts for a German corporation whose interests were partly interwoven with the German location. It acts for an American financial investor whose optimisation goal is the capital return over a defined holding period. The orientation toward electrification as a thirty-year growth theme — Psaros' declared reason for the purchase — will place German drive technology into an American-administered, world-market-oriented supplier role whose revenues are no longer reinvested in Germany.

What VW is experiencing creepingly through operational relocation, Innomotics has completed through a single contract. The case is the five-layer test in pure form. It shows that the layers do not need to erode evenly — they can be shifted simultaneously through a single transaction.

VIII. What Follows

The Innomotics case is no indictment. It is a description. The actors who brought about this shift acted rationally, courteously, competently. The press releases are carefully formulated. The valuation reports are certified. The purchase price of 3.5 billion euros corresponds to the market price. The acquisition price of 15 billion dollars corresponds to the future price. Both numbers are individually correct. Nothing goes wrong in the sense that anyone violates rules. Everything runs its course. That is precisely the problem.

What the cases Innomotics, VW, BASF, Bayer, Daimler-Chrysler, Schaeffler-Leju show in their sum is a systemic process: the continuous transfer of German industrial substance into foreign value chains, endorsed by all participating institutions of the German system — capital market, analyst community, business press, politics. The process is not criticised because it takes place in the language that belongs to the self-description of the system: portfolio optimisation, focus on core business, connecting the real and digital worlds. This language cannot be refuted. It can only be supplemented — by a description that supplies the complementary name for the same process: substance transfer, future exploitation abroad, market price against future price.

The question whether there is an institutional position from which the movement could still be influenced was answered in the negative by the April essay. The Megamachine can distribute subsidies, launch support programmes, hold location summits. It cannot reverse the structural decisions that laid the path. It cannot replace the actors who sit in the executive suites and take the decisions that drive the erosion. What remains possible is a different institutionalisation at a different place: at the point where the invention arises, before it is drawn into the chain of substance transfer. Precisely at this the InnoCoop concept aims, which we are developing in parallel. An institution whose core is not privately redeemable, which bears a purpose that survives if its bearers drift, and whose exit is not the exit of the individual but the passing on of the matter. The German transfer of substance does not stop because the corporations rethink. It stops when substance arises anew at a place where the incentive architecture of the market-price-future-price formula no longer applies.

Until then, the formula remains. It is short enough to remember. It is precise enough to be tested at each concrete deal. And it is bitter enough not to slip through as a slogan. The Germans sell at market prices and buy at future prices. When the reckoning of these deals is drawn, those responsible are no longer in office. Whoever has heard it once sees Innomotics differently. And Innomotics is only the beginning.