Synopsys acquires Ansys for $35 billion, marking the emergence of new engineering software powerhouse

Chip design software company Synopsys announced on Tuesday that it plans to acquire Ansys in a $35 billion cash-and-stock deal, marking a significant development in the engineering software industry. This move follows Synopsys co-founder Aart de Geus handing over the CEO role to Chief Operating Officer Sassine Ghazi just two weeks ago.

The proposed acquisition is notable as the largest in the technology sector since Broadcom acquired VMware for $69 billion in November last year. The deal, valued at $390.19 per share, represents a 29% premium over Ansys’ closing price on December 21, 2023, Reuters reported.

In a statement, Synopsys President and CEO Sassine Ghazi said, “The megatrends of AI, silicon proliferation, and software-defined systems are requiring more compute performance and efficiency in the face of growing, systemic complexity. Bringing together Synopsys’ industry-leading EDA solutions with Ansys’ world-class simulation and analysis capabilities will enable us to deliver a holistic, powerful, and seamlessly integrated silicon-to-systems approach to innovation to help maximize the capabilities of technology R&D teams across a broad range of industries.”

Ghazi added, “This is the logical next step for our successful, seven-year partnership with Ansys and I look forward to working closely with Ajei and the talented Ansys team to realize the benefits of this combination for our customers, shareholders, and employees.”

Back on December 22, Reuters broke the news that Synopsys was in discussions about acquiring Ansys. It turns out that Ansys had begun considering a sale late in the previous year, prompted by interest from design software company Cadence Design Systems (CDNS.O), as shared by insiders familiar with the situation.

Ansys, with a history spanning over five decades, specializes in simulation software used across various industries, from aerospace and defense to automotive and energy. Its products compete with Autodesk’s Fusion 360, AutoCAD, and Dassault Systemes’ Solidworks. On the other hand, Synopsys, founded in 1986, provides chip design software for major manufacturers like Intel, AMD, and Nvidia.

“Since inception 37 years ago, Synopsys has been an innovation pioneer, central to world-changing semiconductor advances in computation, networking, and mobility, and now enabling the new era of ‘pervasive intelligence’,” said Aart de Geus, Executive Chair and Founder of Synopsys. “Joining forces with Ansys, a company we know well from our long-standing partnership, is the latest example of how Synopsys remains at the forefront. Our Board and management team carefully evaluated our top strategic options to lead and win in this fast-growing new wave of electronics and system design. The technology-broadening team-up with Ansys is an ideal, value-enhancing step for our company, our shareholders, and the innovative customers we serve.”

The acquisition is seen as a strategic move to combine Synopsys’ semiconductor electronic design automation (EDA) tools with Ansys’ simulation and analysis portfolio. The companies had already partnered in 2017 to offer solutions for chip designers.

The deal is expected to enhance Synopsys’ adjusted earnings within the second full year post-closing, with the transaction anticipated to be completed in the first half of 2025. In the event of specific circumstances leading to the deal’s termination, such as antitrust hurdles, Synopsys would pay Ansys a termination fee of $1.5 billion. If Ansys chooses another superior proposal, it would owe Synopsys $950 million.