EU Approves $35B Synopsys and Ansys Merger with Conditions

European Commission Greenlights Significant Merger

The European Commission (EC) has approved the merger of Synopsys and Ansys, a $35 billion deal, with the condition that the companies divest a number of products. This merger unites Synopsys, a leader in chip design software, with Ansys, known for its simulation software that aids engineers in modeling and analyzing product behavior.

Background and Context

Announced last January, the merger marks the largest in the tech industry since Broadcom's $69 billion VMware acquisition, which also faced intense regulatory review. The EC’s approval requires that the merging entities prevent potential market dominance by selling overlapping parts of their business.

Impact on Competition

The EC’s decision aims to balance industry consolidation with fair competition. The merger poses a risk of creating a dominant company that could limit competitors who do not provide both chip design and simulation software. As part of the remedy, Synopsys will divest its optics and photonics software divisions, including Code V, LightTools, LucidShape, RSoft, and ImSym. Additionally, Ansys will sell its PowerArtist software, which is crucial for analyzing power consumption in electronic circuits.

International Regulatory Response

The U.K’s Competition and Markets Authority (CMA) has been conducting its own antitrust evaluation and has shown willingness to accept similar divestment commitments from both entities to allow the deal to proceed. Previously, the CMA commenced its investigation in August, signaling the transaction’s significance and potential implications globally.

This is a developing story. Update for more information as it becomes available.