Synopsys and Ansys have entered into a definitive agreement wherein Synopsys will acquire Ansys for US$35 billion. Accordingly, the deal will innovate semiconductor design technology and simulation and analysis.

Under the terms of the agreement, Ansys shareholders will receive $197.00 in cash and 0.3450 shares of Synopsys common stock for each Ansys share.

Most importantly, the deal will bring together Synopsys’ pioneering semiconductor electronic design automation (EDA) with Ansys’ broad simulation and analysis portfolio. Thus, creating a leader in silicon-to-systems design solutions.

“The megatrends of AI, silicon proliferation and software-defined systems are requiring more compute performance and efficiency in the face of growing, systemic complexity. Bringing together Synopsys’ industry-leading EDA solutions with Ansys’ world-class simulation and analysis capabilities will enable us to deliver a holistic, powerful, and seamlessly integrated silicon-to-systems approach,” said Sassine Ghazi, President and CEO of Synopsys.

Moreover, Ghazi said, “This is the logical next step for our successful, seven-year partnership with Ansys.”

Meanwhile, Ajei Gopal, President and CEO of Ansys, said, “This transformative combination brings together each company’s highly complementary capabilities to meet the evolving needs of today’s engineers.”

Compelling Rationale, Significant Value Creation

Combining Leading Capabilities to Meet Customer Demand: 

Nowadays, the integration of semiconductor design and simulation and analysis ensure interconnected systems function properly in real-world settings. Thus, combining Synopsys’ EDA technology with Ansys’ established simulation and analysis capabilities can provide customers a comprehensive, powerful, and system-focused approach. All Ansys customers, including those outside of the semiconductor industry, can benefit from access to a comprehensive portfolio of products.

Accelerates Strategy and Growth in Attractive, Adjacent Areas: 

Synopsys and Ansys have highly complementary businesses and significant expansion opportunities. Thus, the combination will enhance Synopsys’ Silicon to Systems strategy both across the core EDA segment and in highly attractive adjacent growth areas. These include automotive, aerospace, and industrial.

Complementary Fit: 

Synopsys and Ansys have had a successful and growing partnership since 2017. Moreover, they share a culture built on integrity, execution excellence and empowering customers. Combining their highly complementary solutions will provide customers with a broader, deeply integrated suite of software tools to solve their most difficult design challenges. At the same time, gain valuable insights through model-based analysis of complex systems.

Meaningfully Expands Total Addressable Market: 

Synopsys’ total addressable market (TAM) will increase by 1.5x to approximately US$28 billion. This combined TAM will likely grow at roughly an 11% CAGR, driven by megatrends accelerating the need for the fusion of electronics and physics across industries.

Bolsters Synopsys’ Strong Financial Position and Outlook: 

In addition, the combination will also strengthen Synopsys’ financial profile. The combined company expects to continue its industry-leading, double-digit growth, which will outpace TAM growth.