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Synopsys to Acquire Ansys in $35 Billion Mega Deal, Transforming Tech Landscape

Semiconductor design and software giant Synopsys has revealed plans to acquire engineering and product design software firm Ansys in a cash-and-stock deal valued at $35 billion. This acquisition marks one of the largest tech deals in recent years, set to reshape the industry.

Deal Overview

In a significant move, Synopsys will pay approximately $390 per share in a combination of cash and stock, comprising $197 per share in cash and around one-third of a Synopsys share for each Ansys share. The deal is scheduled to close in the first half of 2025, subject to regulatory and shareholder approvals.

Market Impact

Synopsys shares experienced a 3% surge on Tuesday morning following a 12% decline reported by The Wall Street Journal in December during the advanced talks. Ansys shares, while slipping 5%, saw a notable 14% increase in the same period since December.

Shareholder Landscape

Post-merger, Ansys shareholders are expected to hold 16.5% of Synopsys, as disclosed by Synopsys CEO Sassine Ghazi during a conference call. The deal will be financed in part by $16 billion in debt financing, with the remaining $3 billion in non-equity consideration sourced from Synopsys’ cash reserves.

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Financial Snapshot

As of October 31, 2023, Synopsys reported cash and cash equivalents of $1.4 billion. However, the deal is not projected to be immediately accretive, with Synopsys CFO Shelagh Glaser stating that accretion is expected at least a year after the deal concludes.

Leadership Continuity

Ghazi anticipates the continued involvement of Ansys CEO Ajei Gopal post-merger, citing it as the “logical next step” in their seven-year successful partnership. The acquisition is expected to bring significant benefits to customers, shareholders, and employees of both companies.

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Industry Trends

The mega deal follows a trend of notable tech acquisitions in recent months, including Microsoft’s acquisition of Activision Blizzard and Broadcom’s purchase of VMware. Cisco also announced a substantial $28 billion acquisition of Splunk in September, marking its largest-ever deal.

Advisory Roles

Advisors for Synopsys included Evercore and Cleary Gottlieb Steen & Hamilton, while Qatalyst Partners, Skadden, and Goodwin Procter advised Ansys on the transaction.

Timothy Hamilton
Timothy Hamilton
Timothy Hamilton covers business news for our site. With over 10 years of experience in financial news, he holds an MBA from the University of Alaska. He has worked as a web developer, software engineer, and product manager, and has extensive stock market knowledge.

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