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China’s antitrust regulator has conditionally approved a $35bn takeover by US tech company Synopsys of smaller rival Ansys, with its decision coming soon after the Trump administration quietly eased restrictions on exports of chip design software tools.
Monday’s green light comes after China’s State Administration for Market Regulation (SAMR) paused the approval process in May, the Beijing-based regulator said in a statement, confirming a Financial Times report last month. Its statement revealed a quick turnaround, with SAMR taking just one day to grant the approval after it resumed the process last Friday.
In late May, Washington introduced restrictions that in effect banned chip design software makers such as Synopsys from selling to China. It then relaxed the policy at the beginning of this month, according to companies involved.
The U-turns demonstrate how trade negotiations affect policy decisions on a broad range of issues and that a new trade deal between the world’s two superpowers is beginning to take effect. Terms were agreed at the end of last month after talks in Geneva, the culmination of months of negotiations.
SAMR had been holding up the process largely due to the initial US ban, and the quick approval came after China’s commerce ministry urged the regulator to speed it up, according to one person familiar with the matter.
The $35bn deal between the two American software groups was announced in January last year and had already been given the go-ahead by authorities in the US and Europe. It was in the final stage of SAMR’s approval process before it was held up, the FT reported earlier.
Synopsys had been hoping to close the transaction by the end of June, chief executive Sassine Ghazi said on May 28. Headquartered in Silicon Valley, the company provides tools and intellectual property that enable chipmakers such as Nvidia and Intel to design and test their processors.
Ansys, a Pennsylvania-based company that began by developing structural analysis tools, has engineering simulation software used across industries such as automotive, construction, healthcare and defence.
SAMR set out a long list of conditions the two companies needed to follow in order to address its concerns. They included divesting their most overlapping businesses, ensuring Chinese customers could renew existing contracts after the merger, and offering electronic design automation products to Chinese companies fairly, reasonably, and without discrimination regarding pricing and functionality.
SAMR said Synopsys had signed off on the conditions on July 11. Non-compliance could mean penalties under anti-monopoly laws, it added.
Synopsys did not immediately respond to a request for comment.
Additional reporting by Tim Bradshaw in London
