Synopsys’ plans to buy Ansys for $35B falls on UK regulatory radar

The U.K. antitrust regulator has confirmed that it’s carrying out an early-stage inquiry into Synopsys‘ plans to buy Ansys.

The Competition and Markets Authority (CMA) has opened an “invitation to comment,” meaning any stakeholders or interested parties can file their objections to the transaction, after which the regulator will decide whether to progress the investigation to a formal merger inquiry. The CMA hasn’t provided any deadline for comment submissions.

Chip design software maker Synopsys revealed back in January its plans to acquire Ansys, a simulation software developer that helps engineers model and analyze the physical behavior of products (e.g. chips) to evaluate their real-world performance, in a deal worth $35 billion.

Both are publicly traded companies with a combined market cap of $100 billion.

The coming together of these companies would create a comprehensive chip design and simulation powerhouse, one that’s capable of creating more efficient development processes by lowering the fail-rate during the design process. However, such a merger could create a dominant player spanning all facets of the chip design process, thus stifling competitors that don’t offer such a combination.

The Federal Trade Commission (FTC) is already looking at the transaction, though has yet to confirm any further action, and reports suggest that competitors and customers of Synopsys and Ansys are pressuring the European Commission (EC) to take action.

China’s SAMR is also expected to scrutinize the deal — Synopsys has longstanding ties to China, where it has seen significant success even with Huawei sanctions in place, and Ansys too has a notable presence in China.

With the CMA now weighing in, it seems that Synopsys and Ansys might have a long way to go before this deal reaches the finish line.