The UK’s competition watchdog said on Monday it was examining whether Synopsys (NASDAQ: )’s $35 billion takeover of ANSYS (NASDAQ: ) chip design software maker would affect competition in Britain.
The Competition and Markets Authority has not yet launched a formal investigation into the deal.
Context
In January, Synopsys, a maker of chip design software, unveiled plans to acquire ANSYS, whose software is used to create a wide range of products, from airplanes to the tennis rackets used by players like Novak Djokovic, in a cash-and-stock deal worth $35 billion.
Why is this important?
Synopsys specializes in creating tools for designing chips, which complement Ansys software for evaluating broader electronic systems that include these chips.
However, the proposed merger has raised concerns among analysts about potential regulatory challenges in the already consolidated business software sector.
In May, Synopsys, which partners with major chipmakers such as Taiwan Semiconductor Manufacturing Co. and Intel Corp., said Chinese regulators had asked for its cooperation in scrutinizing the deal.
What’s next?
Based on the comments received by the Authority during the information gathering process, it will refer the deal to the first stage investigation or remove all competition concerns.