Synopsys, a chip design software maker, is set to acquire Ansys in a $35 billion cash-and-stock deal. The acquisition would be the largest in the technology sector since Broadcom’s takeover of VMware in a $69 billion deal. This move has the potential to ignite a surge of tech mergers as economic sentiment improves and failed attempts by antitrust regulators pave the way for large-scale acquisitions.
The deal values each share of Ansys at $390.19, representing a 29% premium over its closing price on December 21, 2023. Ansys had started exploring a sale last year after receiving acquisition interest from Cadence Design Systems. Synopsys’s interest in this transformative acquisition is highlighted by the fact that it comes just after a leadership change, with Aart de Geus stepping down as CEO.
Ansys specializes in simulation software used in industries such as aerospace, defense, automotive, and energy to analyze products. Its products compete with Autodesk’s Fusion 360, AutoCAD, and Dassault Systemes’ Solidworks. On the other hand, Synopsys caters to major chipmakers like Intel, AMD, and Nvidia, providing software for chip design across various industries.
The acquisition would bring together Synopsys’s semiconductor electronic design automation (EDA) tools with Ansys’s simulation and analysis portfolio. Both companies have witnessed significant increases in their share prices in the past year, driven by the artificial intelligence boom. They have been partners since 2017, offering solutions to chip designers to enhance the analysis of chips for quality standards.
The transaction is expected to contribute to Synopsys’s adjusted earnings within the second year after the closing, which is anticipated to occur in the first half of 2025. If specific circumstances, including antitrust hurdles, result in the deal being called off, Synopsys will have to pay Ansys a termination fee of $1.5 billion. Conversely, if Ansys terminates the deal for a superior proposal, it will be required to pay a $950 million fee to Synopsys.
In conclusion, Synopsys’s acquisition of Ansys is set to reshape the chip design software landscape, creating synergy between their respective capabilities. As economic conditions improve, more tech mergers like this may emerge, signaling a new wave of consolidation in the industry.
