Seoul: South Korea's antitrust regulator has approved the proposed merger of U.S. chip design software giant Synopsys Inc. and engineering software firm Ansys Inc., contingent upon the companies divesting their assets in overlapping business areas, officials reported.
According to Yonhap News Agency, the Fair Trade Commission (FTC) reached this decision roughly 10 months after Synopsys submitted a request for approval of its $35 billion acquisition of Ansys. The FTC mandated that the companies divest overlapping business units, including register transfer-level power consumption analysis software, as well as optics and photonics software, within six months post-integration.
The FTC justified its conditions by noting that the merger would grant the combined entity a dominant share in several global markets: 60 to 80 percent in the register market, 90 to 100 percent in the optics market, and 55 to 75 percent in the photonics market. This dominance was seen as detrimental to market competition.
Prior to the FTC's ruling, similar conditional approvals were granted by the European Union, Britain, and Japan. Meanwhile, regulatory bodies in the United States, China, Taiwan, and Turkey are still reviewing the merger.
If the merger proceeds, it will mark the largest acquisition in the technology sector since chipmaker Broadcom's purchase of software maker VMware in 2023. Lee Byung-geon, head of the mergers and acquisitions review bureau at the FTC, commented that the decision serves as a precedent to protect domestic semiconductor manufacturers like Samsung Electronics Co. and SK hynix Inc., amid rising competition in the artificial intelligence chip market and ongoing supply chain restructuring.
Lee added that the FTC's decision is a matter of maintaining market order and fair competition, and it is not expected to impact trade relations with the United States.