M&A Takes New Twists

The volume of mergers and acquisitions in the last two years has far surpassed historical records. But now the quality of the deals is changing, too

For example, Macom’s bid for Applied Micro and Broadcom’s for Brocade are like private equity transactions. The buyers aim to carve up the companies, taking the profitable bits and selling off the rest.

I know this is not entirely new. The former Avago famously did this a few years back, slicing LSI into three or four pieces, most of which it sold. But to have two such deals of a fairly large size within a week is a bit breathtaking.

I suspect we’ll see more such deals in the next year. And I see what looks like two other patterns likely to be repeated.

Siemens’ acquisition of Mentor Graphics is similar to Softbank’s purchase of ARM. Both buyers are big broad companies acquiring well-run, medium-sized firms that are not really in their core markets but likely to be good long term investments.

Softbank says it wants to help ARM step on the gas, but it’s too early to tell how much acceleration the deal promises. Siemens might be more likely to tap the brakes on risky investments.

To read the rest of this article, visit EBN sister site EE Times.

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