FTC approves merger of Synopsys, Ansys on divestment conditions

The Fair Trade Commission approved U.S. chip design software firm Synopsys's acquisition of Ansys on the condition that they divest assets in overlapping businesses.

This photo, provided by Yonhap News TV, shows the Fair Trade Commission headquarters in the central city of Sejong. [YONHAP]

Korea's antitrust regulator on Thursday approved the proposed merger of U.S. chip design software giant Synopsys and engineering software firm Ansys on the condition that the companies divest their assets in overlapping business areas, officials said.

The Fair Trade Commission (FTC) made the decision about 10 months after Synopsys filed a request for approval of its $35 billion deal to buy Ansys, according to the agency.

The FTC, however, demanded the two companies sell their overlapping business units, such as register transfer-level power consumption analysis software, as well as optics and photonics software, within six months of a completed integration.

The regulator said it gave such conditions-based approval as the acquisition is expected to leave the integrated company with a 60 to 80 percent share in the global register market, a 90 to 100 percent share in the optics market and a 55 to 75 percent share in the photonics market, undermining competition.

Prior to the FTC's decision, the European Union, Britain and Japan gave similar conditional approvals for the integration plan.

Regulators of the United States, China, Taiwan and Turkey are still reportedly reviewing the matter.

If finalized, the merger between Synopsys and Ansys will be the biggest acquisition in the technology sector since chipmaker Broadcom's takeover of software maker VMware in 2023.

"This case serves as a precedent for preventing potential harm to domestic semiconductor chipmakers, such as Samsung Electronics and SK hynix, which are in fierce international competition amid the rise of the artificial intelligence chip market and supply chain restructuring," said Lee Byung-geon, head of the mergers and acquisitions review bureau at the FTC.

Lee said the FTC's decision will not affect trade relations with the United States as it is a matter of protecting market order and fair competition in Korea.

Yonhap