Synopsys and Ansys in talks to merge: report

Shares of Ansys Inc. soared 18% in trading Friday on reports the company is in discussions to be acquired by Synopsys Inc. in a deal that would create a design-software behemoth.

The potential deal would kick off 2024 with a mega-merger, even as the Federal Trade Commission attempts to crack down on such transactions. Talks remain fluid and a third party might still emerge as a possible suitor of Ansys, according to a Wall Street Journal report, which cited people familiar with the situation.

Ansys
ANSS,
+18.08%
,
which has a market value of nearly $26.3 billion, makes software that helps predict how products in aerospace, healthcare and automotive applications will work in the real world. A deal could be struck early in 2024, according to people familiar with the matter. Ansys reported revenue of $2.1 billion in 2022.

Synopsys
SNPS,
-6.34%
,
with a market value of $85.1 billion, makes software that engineers use to design and test silicon chips used in smartphones, self-driving cars and other forms of artificial intelligence. Its stock has climbed 65% this year as investors have hopped on the AI bandwagon boom. Shares of Synopsys dipped 6% in late trading Friday.

Synopsys’s customers include Nvidia Corp.
NVDA,
-0.33%
,
Intel Corp.
INTC,
+1.95%

and Advanced Micro Devices Inc.
AMD,
-0.22%
.

Representatives from Synopsys and Ansys were not immediately available for comment.

Should the companies strike a merger, it would offer a fresh test for the FTC and its chair, Lina Khan, who have opposed large tech mergers and acquisitions. The agency unsuccessfully sued Facebook parent Meta Platforms Inc.
META,
-0.20%

in its pursuit of VR developer Within, as well as Microsoft Corp.’s
MSFT,
+0.28%

$69 billion purchase of Activision Blizzard Inc.

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