Nov 2016 - Perspective - Doc # US41951316

Perspective: Siemens Buys Mentor Graphics for $4.5 Billion

By: Jeffrey HojloProgram Director, Product Innovation Strategies

Abstract

This IDC Manufacturing Insights Perspective discusses Siemens AG's recent acquisition of Mentor Graphics. The manufacturing world took notice of the recent $4.5 billion acquisition by Siemens of Mentor Graphics, one of the largest PLM players by revenue in the market today. Mentor Graphics will reside in the Digital Factory division of Siemens as part of Siemens PLM and exist as a connected but separate entity in the foreseeable future — much as with Siemens' other recent acquisitions.

The timing is right with this acquisition for both Siemens and Mentor Graphics: Siemens is looking to expand its design portfolio, connected products are exploding (particularly in the automotive market, where both Siemens and Mentor are strong), and the need for electronic design automation (EDA) has never been higher. Mentor Graphics has been under investor pressure (for close to a decade) to sell — but particularly of late, from new investor Elliot Management Corp. — because of "untapped growth potential" and perhaps recent financial struggles.


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