REG - Competition and Mkts - Merger Update: Synopsys / Ansys

ANSYSAnnouncement

20/12/2024 12:00

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RNS Number : 9483Q  Competition and Markets Authority  20 December 2024

 

CMA could approve Synopsys / Ansys merger if competition concerns are resolved

Synopsys' purchase of Ansys raises competition concerns in the supply of
semiconductor chip design and light simulation products in the UK - but deal
could be approved by the CMA if its concerns are resolved.

The Competition and Markets Authority (CMA) has found that Synopsys' proposed
purchase of Ansys for $35 billion could reduce competition in the supply of
certain semiconductor chip design and light simulation products in the UK.

Semiconductor chips are crucial components in technologies used every day by
UK consumers (such as smartphones and laptops) and also in key sectors
including artificial intelligence (AI) and cloud computing. Light simulation
software is used for a wide range of light-related products such as camera
lenses, TV displays, car headlights and lasers. Synopsys and Ansys are two
major suppliers in the semiconductor chip design and light simulation software
sector and their products help a broad range of customers and industries.

Having assessed the evidence, the CMA believes the merger could reduce choice
for customers - which tend to be major companies that operate globally and in
the UK - that rely on these software products. This could lead to a loss of
innovation, lower quality software and/or higher prices which may then be
passed onto UK businesses and consumers.

During its Phase 1 investigation, the CMA examined the impact of the merger
across a wide range of semiconductor chip design and light simulation software
markets, looking at the extent to which Synopsys and Ansys currently compete
or may do so in the future. The CMA found that while the products the
companies offer are largely complementary, the deal could reduce competition
in the supply of three software products where Synopsys and Ansys have strong
market positions and compete closely with one another.

The CMA's concerns are in relation to:

·    global register transfer level power consumption analysis, which is
used to check how much power a chip consumes and requires to function

·    global optics software and global photonics software, which are used
to design and model light-related products

Synopsys and Ansys now have the opportunity to submit proposals to address the
CMA's concerns. If suitable proposals are not submitted, the CMA will progress
to an in-depth Phase 2 investigation.

Naomi Burgoyne, Senior Director of Mergers at the CMA, said:

"Synopsys and Ansys are important suppliers of semiconductor chip design and
light simulation software, and we're concerned that this deal could reduce
innovation and lead to higher prices for these products in the UK.

"Millions of businesses and consumers in the UK use products that rely on
these companies' software every day, whether that's consumer electronic
devices, medical equipment, modern vehicles or even AI.

"The companies now have the opportunity to offer solutions to address our
concerns, otherwise the deal will be referred to an in-depth Phase 2
investigation."

More information on this case is available on the Synopsys / Ansys
(https://www.gov.uk/cma-cases/synopsys-slash-ansys-merger-inquiry) case page.

Notes to Editors:

1.   Synopsys Inc is a US-based supplier of electronic design automation
(EDA) software used in the design of semiconductor chips. Ansys Inc supplies
simulation and analysis (S&A) software which is used across various
industries including semiconductor design, as well as aerospace, automotive
and construction.

2.   The CMA also looked at whether Synopsys or Ansys offer software
products which are important inputs for their competitors, and if so, whether
they could limit their rivals' access to these. The CMA also considered
whether they could degrade or remove interoperability between their products
and those of rivals. Ultimately, the CMA did not find concerns in relation to
this.

3.   Under the Enterprise Act 2002 (the Act) the CMA has a duty to make a
reference to Phase 2 if the CMA believes that it is or may be the case that a
relevant merger situation has been created, or arrangements are in progress or
contemplation which, if carried into effect, will result in the creation of a
relevant merger situation; and the creation of that situation has resulted, or
may be expected to result, in a substantial lessening of competition within
any market or markets in the UK for goods or services. Guidance on the CMA's
mergers jurisdiction and procedure can be read here
(https://www.gov.uk/government/publications/mergers-guidance-on-the-cmas-jurisdiction-and-procedure)
.

4.   The merger is subject to a number of merger investigations in other
jurisdictions including in the EU, US, China, Japan and South Korea and the
CMA has engaged closely with certain other agencies reviewing the merger
throughout its investigation as appropriate.

5.   All media enquiries should be directed to the CMA press office by email
on press@cma.gov.uk (mailto:press@cma.gov.uk) or by phone on 020 3738 6460.

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