Synopsys Proposes Divestitures to Secure EU Approval

By Foo Yun Chee

BRUSSELS (Reuters) – Chip design software company Synopsys (NASDAQ:SNPS) has proposed to sell an Ansys (NASDAQ:ANSS) unit along with one of its own to secure EU approval for its $35 billion acquisition of the chip design software company, according to sources with direct knowledge of the matter.

The European Commission, which serves as the EU's competition watchdog, is gathering feedback from competitors and customers regarding Synopsys' proposal, with a deadline set for December 16.

Synopsys has stated its intention to sell its Optical Solutions Group, a developer of optical design tools, to Keysight Technologies (NYSE:KEYS) contingent on the Ansys deal.

Additionally, Synopsys has offered to divest Ansys PowerArtist, which encompasses its research, development, distribution, licensing, sales, and marketing activities. PowerArtist is a tool designed for analyzing and optimizing power efficiency in designs.

In its efforts to gain regulatory approval, Synopsys announced that customer feedback has been predominantly positive regarding the pro-competitive nature of the deal, expressing expectations for the transaction to complete in the first half of 2025.

Despite not proposing any behavioral remedies related to its business practices, sources indicated that EU antitrust enforcers do not currently have concerns regarding interoperability or product bundling following recent industry feedback.

Ansys software is utilized across various industries to create products, including airplanes and sports equipment, benefiting high-profile athletes like Novak Djokovic.

The European Commission is set to provide a decision on this deal, which is the largest in the technology sector since Broadcom's (NASDAQ:AVGO) $69 billion acquisition of VMware (NYSE:VMW) last year, by January 10.