Synopsys’ planned $35 billion merger with Ansys is now on hold for a while as the UK antitrust authority has launched a preliminary investigation.

The UK competition authority has confirmed that it is conducting a preliminary investigation into Synopsys’ plans to buy Ansys for $35 billion. The Competition and Markets Authority (CMA) has published an “invitation to comment” for interested parties to submit their objections to the transaction.

The merger of these companies could lead to unfair competition as it would enable them to reduce the error rate in the design phase and create more efficient development processes. The British regulator wants to investigate the impact of this planned cooperation on the British market.

The investigation has been initiated

Synopsys creates software for chip design across a variety of industries. Ansys is a developer of simulation software that helps engineers model and analyze the physical behavior of products (in this case, chips) to evaluate their performance in the real world. Chip design software maker Synopsys announced earlier this year that it plans to acquire Ansys.

This has now caught the attention of UK antitrust investigators and is now leading to an initial investigation, which is still at an early stage. The Competition and Markets Authority (CMA) has published an “Invitation to Comment” for stakeholders or interested parties to submit objections to this merger.

Unfair competition

The merger of these companies could lead to unfair competition. The combination of Synopsys’ chip design software and Ansys’ simulation software could create a dominant player in the market. With this combination, the company is able to create more efficient development processes by reducing the error rate in the design phase.

Competitors would not be able to offer a comparable combination and would therefore be at a disadvantage. It is therefore not yet certain whether and when this deal will come to fruition.