Synopsys-Ansys: IT synergy

Synopsys and Ansys are little known to the general public. When the former announced its acquisition of the latter earlier this year, it didn’t make much of a splash outside of the tech press. This was somewhat surprising, given the amount of money changing hands was a not-insignificant $35 billion. To put this sum into context, this is almost exactly Mars’ outlay for Kellanova or the value of the aid package for Ukraine voted by the European Union in October.

The two protagonists occupy a central position in the history of the IT sector, however. Founded in 1986 by Aart de Geus, Synopsys is a Californian company with 20,000 employees specializing in software development for semiconductor and computer manufacturers.

Ansys develops, promotes and supports simulation software for predicting product behavior

Ansys is not a direct competitor, and has a different business model. Founded in Pennsylvania in 1970, it specializes in computer-aided engineering and applied digital simulation. It develops, promotes and supports simulation software for predicting product behavior. The company’s flagship product is its CAD (computer-aided design) software, and its main customers are major aerospace, defense, automotive, energy, construction and, to a lesser extent, healthcare and consumer products groups.

Chips with everything
Semiconductor production is of vital strategic importance in the 21st century, computers embed themselves ever further in our lives. The ever-increasing sophistication of modern devices calls for integration of semiconductor design and simulation and analysis to ensure interconnected systems function optimally. By getting its hands on Ansys’ simulation and analysis capabilities, Synopsys can provide customers a comprehensive, powerful and system-focused approach to innovation.  

Synopsys spent $35 billion to acquire Ansys. This is one of the biggest deals in IT history, behind Dell’s $67 billion acquisition of EMC in 2016 and Broadcom’s $61 billion acquisition of VMware in 2023. The amount parted with is larger than for other deals that have caused much more ink to be spilt, notably Oracle’s $28.3 billion takeover of Cerner in the summer of 2022.

The group, whose brand-new headquarters are located in Sunnyvale, proposed an audacious financial package, offering Ansys shareholders the chance to buy back their shares at a price of $197 per share, plus 0.345 shares in Synopsys for each Ansys share held. In total, this represented $390 per share, according to calculations made by the American business press.

Sassine Ghazi, CEO of Synopsis, said the deal “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." Meanwhile the Canonsburg, PA, headquartered company’s CEO Ajei Gopal commented, “This transformative combination brings together each company’s highly complementary capabilities to meet the evolving needs of today’s engineers and give them unprecedented insight into the performance of their products,” adding “The combined company will accelerate the development of our joint portfolio and deliver an increased level of innovation, which will benefit Ansys’ traditional customers.”

The newly created entity has a size and power to make governments ─ for whom digital sovereignty is becoming increasingly paramount ─ sit up and take notice. China, the European Union and Great Britain are still examining the legality of the takeover, but American lawyers are confident it will receive regulatory approval.