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Photo = Fair Trade Commission |
[Alpha Biz= Kim Jisun] Korea's competition authority has approved the merger between the U.S. semiconductor software companies Synopsys and Ansys, subject to the divestiture of certain assets.
The Fair Trade Commission (FTC) announced on Thursday that it had conditionally approved Synopsys' acquisition of all shares of Ansys (valued at $35 billion, or approximately 50 trillion won). The FTC has stipulated that Synopsys and its affiliates must sell related assets held by Ansys and its affiliates in the market for register transfer level power consumption analysis software, which analyzes the power consumption of semiconductor chips, within six months of the merger. The same condition applies to assets related to optical design (e.g., camera lenses, automotive headlights) and photonics design (e.g., optical fibers, solar panels), which must also be sold within the same period.
The FTC analyzed that there is an overlap in business activities between Synopsys and Ansys in these three markets. If the merger is approved, the combined market share would be estimated to be 60-80% in the register market, 90-100% in the optical market, and 55-75% in photonics, which could lead to a dominant market position.
The FTC expressed concerns that this dominance could result in anti-competitive practices, such as unilateral price increases and unfavorable changes to trade terms. Therefore, the conditional approval was granted to address these concerns.
This conditional approval comes about 10 months after the companies filed for the merger on May 31 last year. The merger review period is 30 days from the filing date and can be extended up to 90 days if necessary, although the time taken for supplementary data is not included in the review period.
During the review process, the FTC consulted with 12 domestic companies, including Samsung Electronics and SK Hynix, which purchase semiconductor chip design software, as well as 15 foreign companies such as Apple, Google, and Qualcomm.
Additionally, the FTC collaborated with competition authorities from the European Union (EU), the United Kingdom, and the U.S. for the review. So far, the EU, the UK, and Japan's competition authorities have approved the merger with asset divestiture conditions, while the competition authorities in the U.S., China, Taiwan, and Turkey are still reviewing the case. This merger is also notable as the first case to use the "merger remedy submission system," which was introduced in Korea’s Fair Trade Act last August.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
