The merger of US-based chip design software giants Synopsys and Ansys worth $35 billion is progressing toward approval in the UK, with the Competition and Markets Authority (CMA) currently evaluating remedies offered by the companies.
Grounds for approval
The CMA said Wednesday that both companies, which have multiple offices in the UK, had offered undertakings in lieu of a reference, which involves the divestment of certain businesses.
“The CMA considers that there are reasonable grounds for believing that the undertakings offered by Synopsys and Ansys or a modified version of them, might be accepted under the Enterprise Act 2002,” the UK watchdog said.
While the specifics have not been disclosed, the concessions are likely aimed at Ensuring Competition In The Chip Design Software Industry and addressing potential issues related to market dominance and customer choice.
On December 31, 2024, Ansys proposed selling its power consumption analysis product used in the design of digital chips, ensuring that other players in the Semiconductor Market retain access to critical tools.
Synopsys plans to divest its optics and photonics software unit, which supports the design of high-precision systems like lasers and optical devices.
This measure aims to preserve competition in the specialized optics and photonics software segment.
The companies said in a statement that they are pleased with the regulator’s decision, adding that they will maintain “constructive and collaborative engagement” with the CMA.
Concerns raised
The CMA had raised earlier concerns that the merger could lead to reduced competition in the chip design software market, potentially stifling innovation and driving up costs for customers.
The CMA will thoroughly review the proposed concessions to ensure they effectively address the competition concerns. If the proposed measures sufficiently address the competition concerns, the deal could move forward without requiring further regulatory intervention.
Failure to resolve these issues could lead to a more in-depth investigation or even a potential block of the transaction.
Key background
Synopsys announced its cash-and-stock acquisition of Ansys in January 2024, a deal aimed at combining two leaders in software for designing products ranging from airplanes to tennis rackets.
The $35 billion deal has drawn attention from multiple regulators worldwide, given its potential to reshape the competitive Landscape In The Semiconductor Industry.
What to watch for
The competition watchdog said it has until March 5 to decide whether to accept the proposed undertakings by Synopsys and Ansys. If necessary, the CMA has the option to extend the deadline to May 6, 2025, for further review.
