BEIJING—China’s market regulator has granted conditional approval for U.S. chip design software giant Synopsys (SNPS.O) to acquire engineering simulation firm Ansys (ANSS.O) for $35 billion, removing the final major hurdle for one of the tech sector’s biggest deals.
The State Administration for Market Regulation (SAMR) announced its decision on Monday, ending months of antitrust scrutiny that had delayed the merger. The deal, first announced in early 2023, had already secured regulatory clearance in other key markets, including the U.S. and Europe, but faced prolonged reviews in China amid escalating U.S.-China tech tensions. Synopsys said the transaction is now expected to close around July 17, just after the initial July 15 deadline.
Conditions Imposed to Protect Chinese Market Access
SAMR’s approval comes with strict requirements to ensure fair competition and continued access for Chinese customers. The merged entity must:
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Supply EDA (electronic design automation) tools to Chinese clients on fair, non-discriminatory terms
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Honor all existing customer contracts
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Maintain interoperability agreements and renew them upon request
These conditions aim to prevent Synopsys from restricting Chinese firms’ access to critical chip design tools—a sensitive issue given past U.S. export controls on advanced EDA software.
Deal Bolsters Synopsys in Battle Against Cadence
The acquisition will significantly expand Synopsys’ portfolio, combining its chip design software with Ansys’ simulation and analysis tools, strengthening its position against rival Cadence Design Systems (CDNS.O). Analysts say the merger could reshape the EDA industry, giving Synopsys an edge in integrated design solutions.
U.S.-China Tech Tensions Loom Over Approval
The deal faced uncertainty due to Washington’s restrictions on advanced EDA exports to China, raising fears Beijing might block it in retaliation. However, the U.S. recently eased some chip design software export curbs, likely smoothing the path for SAMR’s approval.
With regulatory hurdles now cleared, Synopsys and Ansys are set to finalize the merger, marking a major consolidation in the semiconductor software sector. Shares of both firms rose in premarket trading following the news, with Synopsys up 3% and Ansys gaining 4.5%.