Synopsys, a semiconductor design and software firm, has announced its acquisition of Ansys, an engineering and product design software firm, in a cash-and-stock deal valued at approximately $35 billion. The deal, expected to close in the first half of 2025, is subject to regulatory and shareholder approval.

Under the terms of the acquisition, Synopsys will pay approximately $390 per share to Ansys shareholders, comprising $197 per share in cash and approximately one-third of a Synopsys share for each Ansys share. Following the merger, Ansys shareholders will own 16.5% of Synopsys.

Since the announcement, Synopsys shares rose by 3% while Ansys shares slipped by 5%. However, Ansys shares were up more than 14% since The Wall Street Journal reported in December that the two companies were in advanced talks.

The deal will be partially funded by $16 billion of debt financing, with the remaining $3 billion nonequity consideration coming from Synopsys’ cash. Synopsys reported cash and cash equivalents of $1.4 billion for the quarter ended Oct. 31, 2023.

Synopsys CFO Shelagh Glaser mentioned that the deal will not be immediately accretive until at least a year after it closes. Synopsys CEO Sassine Ghazi expressed his anticipation of working closely with Ajei Gopal, Ansys CEO, and the Ansys team to realize the benefits of the combination for customers, shareholders, and employees.

This acquisition is one of the largest tech deals announced in recent years, following several other significant deals, including Microsoft’s acquisition of Activision Blizzard and Broadcom’s purchase of VMware. Evercore and Cleary Gottlieb Steen & Hamilton served as advisors to Synopsys, while Qatalyst Partners, Skadden, and Goodwin Procter advised Ansys.

With the tech industry witnessing major consolidations and acquisitions, the Synopsys-Ansys deal marks a significant move that is expected to reshape the landscape of software and engineering firms in the coming years.