By Milana Vinn and Anirban Sen
NEW YORK (Reuters) -Design software maker Synopsys has finalized terms to acquire engineering software company Ansys for about $35 billion in cash and stock, two people familiar with the matter said on Tuesday.
The transaction would be the biggest acquisition in the technology sector since chip maker Broadcom took over software maker VMware last November in a $69 billion deal. It could herald more big deals as a pick-up in economic sentiment and some failed attempts by antitrust regulators to thwart deals embolden chief executives to place large acquisition bets.
Synopsys will pay about $19 billion in cash and $16 billion in Synopsys stock for Ansys, one of the sources said. The deal contract will be in effect for as long as 24 months to give the companies time to get the deal cleared by antitrust regulators, the source added.
The deal values Ansys at slightly less than $400 per share and represents a roughly 30% premium to Ansys’ closing share price on Dec. 21, the day before Reuters was first to report the two companies were in deal negotiations.
The transaction will be announced on Tuesday morning, the sources said.
Synopsys and Ansys did not immediately respond to requests for comment.
The deal comes just two weeks after Synopsys co-founder and executive chairman Aart de Geus handed over the chief executive reins to chief operating officer Sassine Ghazi. The pursuit of such a transformative acquisition amid a leadership change underscores the commercial appeal of Ansys’ software, which is used widely in design, including in tennis to design rackets for players like Novak Djokovic.
Synopsys, which caters to major chipmakers like Intel, Advanced Micro Devices and Nvidia, makes software that is used for chip design across several industries. Ansys specializes in simulation software that is used by engineers to design several sectors, including aerospace and defense, automotive, energy, industrial equipment, consumer products, healthcare and construction.
Both companies have seen their share price jump significantly over the past 12 months, amid a boom in artificial intelligence.
In 2017, the two companies forged an alliance to help their customers use their respective technologies more effectively.
(Reporting by Milana Vinn and Anirban Sen in New YorkEditing by Greg Roumeliotis and Bernadette Baum)
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