Synopsys and Ansys have offered undertakings, including divestments, to address competition concerns raised by the UK Competition and Markets Authority (CMA) regarding their $35bn acquisition deal. The CMA announced it is provisionally considering the undertakings submitted by the companies under the Enterprise Act 2002, which could avert a deeper investigation into the merger.
While Synopsys is an electronic design automation company, Ansys specialises in engineering simulation and 3D design software. The CMA’s concerns stem from potential competition issues in overlapping areas of the companies’ operations. These include Ansys’ power consumption analysis tools for digital chips and Synopsys’ optics and photonics software used in light-based product design and communications. To mitigate these issues, the companies proposed divesting Ansys’ product and Synopsys’ global optics and photonics software business.
The CMA confirmed that the undertakings, submitted on 31 December 2024, might be sufficient to address competition concerns, though it retains the right to extend its decision-making period. The regulator has until 5 March 2025 to decide whether to accept the proposed remedies, with a possible extension to 6 May 2025.
Synopsys responds to CMA’s provisional acceptance
In a statement, Synopsys expressed satisfaction with the CMA’s provisional acceptance of the remedies, highlighting its ongoing collaboration with the regulator. The company emphasised its commitment to resolving regulatory concerns while advancing the transaction. “We are very pleased that today the CMA has taken the important step of provisionally accepting our proposed remedies in Phase 1 rather than referring the transaction to Phase 2,” the company stated.
“We will maintain our constructive and collaborative engagement with the CMA as it completes its process,” it continued. “Customers continue to express their overwhelming support for the transaction. Together, Synopsys and Ansys can help drive innovation across industries by addressing the rapidly increasing customer need for system design solutions that provide a deeper integration of EDA and Simulation and Analysis (S&A) software.”
The companies expect the transaction to close in the first half of this year.
The proposed merger, announced in January 2024, has faced scrutiny from multiple regulators, including the European Commission (EC). To address the European Union’s (EU) antitrust concerns, Synopsys had earlier agreed to divest its Optical Solutions Group to Keysight Technologies and relinquish Ansys’ PowerArtist tool. These divestments aim to ensure competition in critical markets, including energy-efficient chip design and light-based technology applications.
The EC’s preliminary review of the acquisition is set to conclude this week. Both the UK and EU regulators have underscored the potential impact of the merger on innovation and pricing within the semiconductor and simulation software sectors.
Under the terms of the acquisition, Ansys shareholders will receive $197 in cash and 0.345 shares of Synopsys stock per Ansys share. The merger seeks to position the combined entity as a leader in integrated design solutions by merging Synopsys’ semiconductor electronic design automation (EDA) expertise with Ansys’ simulation tools. These tools are widely used across sectors, including aerospace, automotive, and consumer goods.
Read more: Synopsys moves closer to EU approval for $35bn Ansys acquisition
