Synopsys (SNPS) has received conditional approval from the European Commission (EC) for its $35 billion acquisition of Ansys, following the companies’ agreement to divest certain segments of their businesses. These steps aim to safeguard competition in markets for optics, photonics, and power consumption analysis software.
Stay Ahead of the Market:
- Discover outperforming stocks and invest smarter with Top Smart Score Stocks
- Filter, analyze, and streamline your search for investment opportunities using Tipranks' Stock Screener
The merger, first announced in January 2024, will combine Synopsys’ expertise in chip design with Ansys’ simulation software, providing advanced solutions for developing complex chips and computing systems.
Although the European Commission’s approval is a key step, the deal still needs clearance from regulators in the UK and the U.S., including the Competition and Markets Authority and the Federal Trade Commission. Synopsys plans to close the acquisition by mid-2025, provided it meets these requirements and completes the required divestitures.
Streamlining Operations
As part of the sale process, Synopsys plans to sell its Optical Solutions Group to Keysight Technologies (KEYS), a leading provider of electronics test and measurement tools and software. Concurrently, Ansys has agreed to sell its PowerArtist tool, which specializes in power-efficient design, to Keysight Technologies.
Both of these divestitures are intended to resolve competition issues and are a condition for the merger’s approval.
What Is the Price Target for SNPS?
Turning to Wall Street, analysts have a Strong Buy consensus rating on SNPS stock based on 11 Buys and 1 Hold rating assigned in the past three months, as indicated by the graphic below. The average SNPS price target of $642.73 per share implies 30.49% upside potential.
