Synopsys' proposed acquisition of Ansys could reduce competition in the semiconductor chip design and light simulation software sector in the UK, as highlighted in a recent statement from Britain's Competition and Markets Authority (CMA). In January, Synopsys agreed to acquire Ansys in a cash-and-stock deal valued at approximately $35 billion.
At that time, the companies projected the deal would close in the first half of 2025. By August, the regulator sought public input on the implications of the transaction for competition in the UK market, which led to a formal inquiry being launched in October. The CMA's investigation revealed that the proposed deal could diminish competition in the supply of three software products where Synopsys and Ansys hold significant market positions and closely compete.
This was articulated in the authority's phase 1 investigation, which raised concerns that the acquisition might limit customer options. The regulator expressed specific apprehensions regarding a power consumption analysis tool and global optics and photonics software. Naomi Burgoyne, the CMA's senior director of mergers, stated, "Synopsys and Ansys are important suppliers of semiconductor chip design and light simulation software, and we're concerned that this deal could reduce innovation and lead to higher prices for these products in the UK." Both Synopsys and Ansys have the opportunity to propose measures to mitigate the CMA's concerns.
An in-depth phase 2 investigation will commence if satisfactory proposals are not submitted. The deal stands a chance of being approved if the issues flagged by the CMA are adequately addressed. In response to the CMA's phase 1 announcement, Synopsys indicated that this is a typical step in the UK regulatory review process.
The company further stated, "We have already taken steps to address all concerns raised by the CMA after their phase 1 investigation. We remain confident in a positive resolution of the ongoing regulatory review process, and we continue to expect the transaction to close in the first half of 2025." Additionally, in September, Synopsys consented to divest its optical solutions business to Keysight Technologies, contingent upon regulatory approvals and the finalization of the proposed Ansys deal. Ansys has not provided an official response to requests for comment..