Cleary Gottlieb Steen & Hamilton is advising chip design software maker Synopsys on its $35bn cash-and-stock acquisition of Ansys, which is being repped by Skadden Arps Slate Meagher & Flom and Goodwin Procter.  

The deal will see Synopsys combine its semiconductor electronic design automation (EDA) with longtime partner Ansys’ complementary simulation technology for designers of microchips, cars and planes. It will create a huge new player in a sector of the business software industry that is already intensely consolidated, Reuters reported, with Wells Fargo saying in a note the deal creates regulatory uncertainty.    

The transaction is the largest in the tech sector since chipmaker Broadcom closed its $69bn acquisition of software maker VMware last November, in a deal that saw Wachtell Lipton, O’Melveny & Myers and Cleary called in to advise Broadcom and Gibson Dunn act for VMWare. 

The Cleary M&A team that worked on the Synopsys deal was led by partners Chris Moore, Paul Shim and Benet O’Reilly. It also included partners Duane McLaughlin (finance); Helena Grannis (capital markets); Meyer Fedida and Maureen Linch (both tax); Julia Petty (executive compensation and employee benefits); Brian Byrne and Kenneth Reinker (both US antitrust); Jackie Holland, Christopher Cook and Robbert Snelders (all UK and EU antitrust); Chase Kaniecki (CFIUS and FDI); and Daniel Ilan (intellectual property). Senior attorney Jim Corsiglia also advised on anticorruption and sanctions matters. 

The Skadden team advising Pittsburgh-based Ansys was led by M&A partners Mike Ringler and Peter Jones and included executive compensation and benefits partner Page Griffin; antitrust/competition partners Steven Sunshine, Andrew Foster and Joseph Rancour; CFIUS and national security partner Michael Leiter; banking partner Steven Messina; tax partner Nathan Giesselman; and SEC reporting and compliance partner Raquel Fox. 

Meantime Goodwin’s M&A and technology teams served as co-counsel to Ansys with Skadden; the was team led by global head of M&A Stuart Cable, public M&A co-chair Lisa Haddad and corporate partner James Ding. 

Skadden and Cleary were both in the top 15 in LSEG’s global M&A legal advisor rankings by deal value for 2023, when worldwide M&A activity fell to a 10-year low of $2.9trn. Skadden came in sixth, working on deals worth $303.1bn, while Cleary placed 11th, working on deals worth $216.2bn. 

Goodwin was not among the top 25 firms by deal value but topped the rankings by deal volume, working on 879 deals worth $124.1bn, compared to Skadden’s 218 and Cleary’s 148. 

Despite a few big-ticket deals, the value of M&A in the tech industry plunged 47% last year to $370.5bn, held back by a combination of ongoing interest rate increases, persistently high inflation rates and antitrust scrutiny from regulators.  

The largest tech deal announced in 2023 was the $29bn acquisition of data and security software company Splunk by Juniper’s rival Cisco, which saw Simpson Thacher & Bartlett called in as Cisco’s legal counsel and Cravath Swaine & Moore act as regulatory counsel. Skadden advised Splunk.  

Under the terms of the Synopsys merger deal with Ansys, Ansys shareholders will receive $197 in cash and 0.345 shares of Synopsys common stock for each Ansys share, representing an enterprise value of around $35bn based on Synopsys’ closing price on 21 December 2023.  

The deal implies a per share value of $390.19 and represents a premium of about 29% over Ansys’ closing price on December 21 2023.  

Synopsys said it intends to fund the $19bn of cash consideration through a combination of its cash on hand and debt financing and has obtained $16bn of fully committed debt financing. 

The deal is expected to close in the first half of 2025, subject to approval from regulators and Ansys shareholders.  

Evercore is serving as financial advisor to Synopsys on the deal, while Qatalyst Partners is serving as financial advisor to Ansys.