Shares in electronic design automation firm Synopsys (SNPS) were higher today after Chinese regulators gave the green light to its $35 billion takeover of peer Ansys (ANSS).
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The decision from the Chinese State Administration for Market Regulations comes only a month after it postponed its approval of the deal between the two U.S. firms which was first announced in early 2024.
$28 Billion Market
The transaction had already entered the last stage of the Chinese regulator’s approval process and was expected to be completed by the end of June.
Synopsys hopes the deal will create a leader in silicon to systems design solutions and help it attack a $28 billion market. Ansys produces engineering simulation software used across industries such as automotive, construction, healthcare and defense.
Synopsys will also aim to boost its revenue growth which trails its rivals in the sector, including CrowdStrike (CRWD).
However, President Trump’s decision to apply additional export controls on shipments of semiconductor design software from companies such as Synopsys back in May made China have second thoughts.
Nvidia Supplier
But, it is understood, according to a report in the Financial Times, that the Trump administration “quietly relaxed” these rules at the beginning of July.
It was also reported that the regulator had received the hurry up from China’s commerce ministry to get the deal approved.
The close relationship between semiconductor giant Nvidia (NVDA) and China, including the design of a Chinese specific chip, has also likely played a part. That’s because Synopsys provides design tools and intellectual property used by chip giants like Nvidia and Intel (INTC) to help them design and test their processors.
Is SNPS a Good Stock to Buy Now?
Given the news today does that shift investor appetite for SNPS stock? On TipRanks, SNPS has a Strong Buy consensus based on 13 Buy and 1 Hold ratings. Its highest price target is $685. SNPS stock’s consensus price target is $605.62 implying a 8.29% upside.
