FTC Mandates Divestitures for $35bn Synopsys-Ansys Merger

The US Federal Trade Commission (FTC) has approved a $35 billion merger between Synopsys and Ansys, but with the condition that Synopsys must divest its optical and photonic design tools and Ansys must sell its RTL power analysis software, PowerArtist, to Keysight Technologies to prevent harm to competition in critical software markets for semiconductor and light simulation design. The divestitures must be completed within 10 days of closing the merger.

The US Federal Trade Commission (FTC) has approved the $35 billion merger between Synopsys and Ansys, subject to the condition that Synopsys must divest its optical and photonic design tools, while Ansys must sell its RTL power analysis software, PowerArtist, to Keysight Technologies. The divestitures must be completed within 10 days of the merger's closing.

The FTC's decision aims to preserve competition in critical software markets for semiconductor and light simulation design. Synopsys, a leading developer of Electronic Design Automation software, and Ansys, a provider of Simulation & Analysis software, compete directly in these markets. The proposed divestitures will help maintain head-to-head competition and prevent higher prices and decreased innovation [3].

Wall Street analysts project a significant upside for Synopsys Inc (SNPS), with a potential 29.15% increase from its current stock price. The company holds an "Outperform" rating with a promising GF Value estimate suggesting further growth potential [1]. Keysight Technologies Inc (KEYS), which will acquire the divested assets, also shows promise with a one-year price target averaging $186.37, indicating a 17.56% upside from its current price [2].

The FTC's decision underscores its vigilance in maintaining a balanced market landscape. The divestitures will ensure that competition remains robust within the industries critical to modern technological advancements, ultimately benefiting consumers [3].

References:
[1] https://www.gurufocus.com/news/2894595/ftc-enforces-asset-divestiture-in-synopsys-snps-and-ansys-merger
[2] https://www.gurufocus.com/news/2894289/keysight-technologies-keys-to-acquire-divested-assets-from-synopsys-and-ansys-keys-stock-news
[3] https://www.ftc.gov/news-events/news/press-releases/2025/05/ftc-require-synopsys-ansys-divest-assets-proceed-merger