Analysis: Dissecting the MIPS-Chipidea breakup

Bolaji Ojo, Junko Yoshida
EE Times (05/18/2009 2:13 PM EDT)
 
MANHASSET, N.Y. — Most mergers and acquisitions rarely work. When they do, it's because both parties have time, patience, commitment and money to burn in the process of integrating the two organizations.

An examination of the recent MIPS Technologies-Chipidea breakup strongly suggests that neither MIPS nor Chipidea had sufficient amounts of these key attributes.

Only 18 months after the Chipidea acquisition, MIPS -- faced with quarterly scrutiny by investors and the sharp decline of the global market -- had to give up the analog and mixed-signal IP supplier, once regarded as Europe's best kept secret.

MIPS executives blame the failed marriage on the overall softening of the economy. John Bourgoin, MIPS president and CEO, nonetheless stood by his original view, calling the acquisition of the analog IP vendor a "strategic move."

In contrast, former Chipidea engineers and marketing officials said "MIPS and Chipidea was a good fit, but [the merger was] mismanaged." They argued that it was MIPS' "integration dogma" that destroyed Chipidea's sales organization, thereby undermining the merger.