On January 16th local time, chip design software manufacturer Synopsys announced that it will acquire industrial simulation software giant Ansys for $35 billion in cash and stock trading. This news has caused industry turbulence and is expected to further reshape the global industrial software landscape.
After the news was announced on the same day, the stock price of Ansys plummeted by more than 4%, while the stock price of Xinsi rose by about 3.5%. Boosted by the wave of artificial intelligence, the stock prices of both companies have risen significantly in the past year.
Since 2023, large-scale mergers and acquisitions in the industrial software field have been ongoing. Last November, chip manufacturer Broadcom acquired software manufacturer VMware for $69 billion, becoming one of the largest acquisitions in the industry.
The intensive industry mergers and acquisitions have benefited from the expectation of interest rate cuts by the Federal Reserve and recent regulatory clearance for some large transactions, but the industry expects that the acquisition of Ansys by Xinsi may still trigger antitrust scrutiny.
Aart de Geus, founder of Xinsi Technology, stated on the company's website that the company is promoting a new era of "inclusive intelligence", and Ansys is a long-term partner of Xinsi Technology that can help the company achieve a new wave of leading electronic system design.
Sassine Ghazi, President and CEO of Xinsi Technology, stated that the acquisition of Ansys is a "logical next step" after a 7-year partnership between the two companies. He said, "Faced with the increasing complexity of systems, the trend of artificial intelligence, chips, and software defined systems requires higher computational performance and efficiency. Combining innovative EDA solutions with Ansys' simulation and analysis capabilities will enable us to provide comprehensive and seamless integration of innovative methods from chips to systems."
Ansys President and CEO Ajei Gopal stated that the two companies have highly complementary capabilities to meet the ever-changing needs of engineers today and create greater value.
Ansys simulation software is widely used in industrial fields such as aerospace, national defense, automotive, and energy. The acquisition of Ansys by Xinsi is also expected to change the industry landscape. Ansys's main competitors include Solidworks under Autodesk and Dassault Systems.
Xinsi Technology provides chip design services to major chip manufacturers such as Intel, AMD, and Nvidia, producing software for chip design in multiple industries.
"This transaction will combine Xinsi Technology's semiconductor electronic design automation (EDA) tool with Ansys' simulation and analysis software product portfolio to achieve complementary and expanding capabilities. For Xinsi Technology, it can help it expand beyond EDA," Zhu Caihua, Chairman of Shanghai Qingyi Industrial Software Company, analyzed to First Financial reporters.
Zhu Caihua said that this acquisition is also a big event for the industry. The trend of mergers and acquisitions of foreign industrial software manufacturers has intensified, forming a more comprehensive product coverage and a larger market scale, and constantly strengthening the dominant position in the market. He believes that this acquisition is also likely to involve antitrust scrutiny.
According to the official website of Ansys, the transaction is expected to be completed in the first half of 2025 and is expected to achieve a significant increase in value thereafter.
Ansys also stated that if the transaction is cancelled under specific circumstances (including antitrust obstacles), Xinsi Technology will pay Ansys a termination fee of $1.5 billion; If Ansys terminates the transaction and accepts another better acquisition offer, it will need to pay a breakup fee of $950 million to Xinsi Technology.