Analyst: Cadence/Mentor merger "a bad idea"

Rick Merritt, EE Times
(06/17/2008 2:54 PM EDT)
URL: http://www.eetimes.com/showArticle.jhtml?articleID=208700171
 
SAN JOSE, Calif. — Cadence Design Systems is under pressure and may lose its top spot in the electronic design automation sector, but its proposed $1.6 billion merger with Mentor Graphics is "a really bad idea," said a veteran EDA analyst.

"You would be sticking together two companies that have little synergy, lots of overlap and enough combined debt with the deal to make it hard to keep the pace in R&D," said Gary Smith, principal of Gary Smith EDA (Santa Clara, Calif.). "This deal would be like tying a boat anchor to the two companies and potentially sinking them both," he added.

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