The UK Competition and Markets Authority (CMA) has launched an inquiry into Synopsys’ previously announced $35bn acquisition of engineering simulation and 3D design software firm Ansys. The British competition watchdog said it is considering whether the deal would create a relevant merger situation under the merger provisions of the Enterprise Act 2002. As such, the CMA will investigate whether the proposed transaction would lead to a significant reduction in competition within any market or markets in the UK for services or goods.
To help with its assessment, the CMA is seeking comments on the proposed acquisition from interested parties. The last date for filing the comments is to be confirmed by the antitrust regulator.
The dates for the deadline for the phase 1 decision and launch of the merger inquiry are yet to be confirmed by the anti-trust regulator.
In addition, the UK CMA stated that it has not yet launched a formal investigation into the transaction.
Ansys takeover by Synopsys could lead to the creation of systems design solutions major
The cash and stock deal between the American electronic design automation company and Ansys was announced in January this year. Under the terms of the definitive agreement, shareholders of the Nasdaq-listed Ansys will receive $197 in cash and 0.345 shares of Synopsys common stock as consideration.
The merger is aimed at creating a silicon-to-systems design solutions major. Upon the completion of the deal, Ansys’ shareholders will hold approximately 16.5% of the combined company on a pro forma basis.
Through the acquisition, Synopsys aims to integrate its semiconductor electronic design automation (EDA) with Ansys’ capabilities in simulation and analysis to offer customers a comprehensive, robust, and system-focused approach to innovation.
The deal is also expected to improve Synopsys’ silicon to systems strategy spanning the core EDA segment and extending into highly promising adjacent growth areas including automotive, aerospace, and industrial. The merged entity is also estimated to achieve run-rate cost synergies of nearly $400m by year three after the closing of the deal and about the same amount in the form of run-rate revenue synergies by year four post-closing. The transaction, subject to approval by Ansys’ shareholders, regulatory approvals, and other customary conditions, is expected to be closed in the first half of 2025.
CMA active on tech takeovers
Recent months have seen a string of investigations into tech takeovers and partnerships by the CMA. These include IBM’s acquisition of Hashicorp, Microsoft’s alliance with Inflection AI and Redmond’s relationship with OpenAI.
Not every probe has resulted in the denial of mergers or the issuance of fines. Last week, for example, the British antitrust regulator approved Hewlett Packard Enterprise (HPE)’s $14bn acquisition of artificial intelligence (AI)-native networks developer Juniper Networks. In May, meanwhile, the CMA called off its investigation into Microsoft’s relationship with French AI startup Mistral.
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