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And then there were two …

Many EDA companies have come and gone over the last three decades or so, but three have survived – Cadence, Synopsys and Mentor Graphics. But, in a $4.5billion deal, Mentor has been acquired by Siemens in a move which broadens its industrial software portfolio.

Mentor has been under pressure for some years; mainly from investors, but also from competitors in the EDA world. It rejected a $1.6bn offer from Cadence in 2008, then fended off an aggressive attack by Wall Street investor Carl Icahn, who bought about 15% of the company and got three seats on the Mentor board. His view was that not enough cash was coming back to shareholders and that Mentor should either be sold or broken up.

This particular baton was picked up recently by another investment company, which claimed Mentor shares were ‘deeply undervalued’.

Mentor will become part of Siemens’ Product Lifecycle Management software business – itself part of Siemens Digital Factory division.

Does it make sense? Siemens says it will be able to offer mechanical, thermal, electrical, electronic and embedded software design on an integrated platform.

Mentor has the most diversified product range of the ‘big three’, with interests in mechanical design, thermal management and automotive electrics, but whether these complement or add to Siemens’ software remains to be seen.

Investors will be happy, but whether it’s good for the industry is another question.

Graham Pitcher

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