The companies said in a joint statement Monday that Mentor's board recommended shareholders approve the deal.
Siemens said it would pay $37.25 a share in cash, or 21 percent more than Mentor's closing price on Friday.
Mentor, based in Wilsonville, Oregon, specializes in software used to design computer chips. It has customers in industries ranging from aerospace to consumer electronics and 5,700 employees in 32 countries.
Siemens CEO Joe Kaeser said in a statement that Mentor was "an established technology leader with a talented employee base that will allow us to supplement our world-class industrial software portfolio.
Read the announcement from the two companies.
"This acquisition decisively extends Siemens' leading Digital Enterprise Software portfolio with Mentor’s well established electronics IC and systems design, simulation and manufacturing solutions. These capabilities are essential for today's smart connected products such as autonomous vehicles," the company statement said.