Synopsys to Acquire Simulation Software Company Ansys for $ 35 Bn

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Combining Synopsys’ EDA expertise with Ansys simulation and analysis portfolio, the deal is expected to complete in the first half of 2025, allowing for a 24-month timeframe.

Chip Design Software maker Synopsys is set to acquire Ansys, a company known for creating Simulation softwares, in a $35 billion cash-and-stock deal. This marks the largest technology sector acquisition since Broadcom’s $69 billion takeover of VMware. The deal values Ansys at $390.19 per share (a 29% premium over its last close on Dec. 21, 2023).

Ansys makes product analysis simulation software for engineers, designers and researchers across industries like aerospace, defense, automotive and energy.  The collaboration combines Synopsys’ semiconductor electronic design automation (EDA) tools with Ansys’ simulation and analysis portfolio, in an already highly consolidated EDA industry dominated by Synopsys and Cadence. 

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The transaction is expected to boost Synopsys’ adjusted earnings within the second full year post-closing and be substantially accretive thereafter. If the deal falls through due to specific conditions, including antitrust issues, Synopsys will owe Ansys a $1.5 billion termination fee, while Ansys would pay $950 million if it accepts a superior proposal.

Synopsys CEO Sassine Ghazi, who recently took over from co-founder Aart de Geus, highlighted the market demand for integrated solutions. Ansys, known for its simulation software used across various industries, competes with Autodesk’s Fusion 360, AutoCAD, and Dassault Systemes’ Solidworks.

While Ansys is not a direct competitor to Synopsys or Cadence, the acquisition could still attract regulatory scrutiny, especially in critical markets like China. Both companies are optimistic about the deal’s completion in the first half of 2025, allowing for a 24-month timeframe.

Synopsys’ shares increased by 3.8% to $513 after the announcement, while Ansys shares dropped by 4.8% to $329.86. This acquisition will create a major new entity in an already consolidated business software industry, raising regulatory uncertainty as noted by Wells Fargo.

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