The Federal Trade Commission (FTC) has announced that Synopsys, Inc. and Ansys, Inc. must divest specific assets to alleviate antitrust issues surrounding their proposed $35 billion merger. This decision aims to maintain competition in essential software tool markets that are vital for semiconductor design and light simulation devices.

According to Daniel Guarnera, Director of the FTC’s Bureau of Competition, the divestiture order is designed to protect consumers from potential price increases on everyday products that rely on advanced technology, such as cars, smartphones, and televisions. The FTC's action is seen as a necessary step to ensure that competition remains robust in software markets critical for the development of digital products.

Synopsys is recognized as a leading provider of Electronic Design Automation software, while Ansys specializes in Simulation & Analysis software. The proposed consent order requires Synopsys to divest its optical software tools, which are used for designing optical devices, and its photonic software tools, which are essential for devices that utilize photons for information transmission. Additionally, Ansys will divest its PowerArtist tool, which optimizes power consumption in digital chip design.

The divested assets will be transferred to Keysight Technologies, Inc. The FTC's complaint highlights that the merger would eliminate direct competition between Synopsys and Ansys in three key markets, potentially leading to higher prices and reduced innovation, adversely affecting both manufacturers and consumers.

The consent order stipulates that the divestitures must be completed within 10 days following Synopsys's acquisition of Ansys. Furthermore, the companies are required to provide limited transition services to ensure that Keysight can compete effectively. A monitor will be appointed to oversee compliance with the order, and a divestiture trustee will be designated if the companies fail to meet the divestiture requirements.

The FTC collaborated with competition agencies from the European Union, United Kingdom, Japan, and South Korea to evaluate the merger and its implications. The Commission's vote to issue the complaint and accept the consent agreement for public comment was unanimous, with a 3-0 decision.

Members of the public will have 30 days to submit comments regarding the proposed consent agreement, which will be processed and made available on Regulations.gov.