On May 28, 2025, the Federal Trade Commission (FTC) announced that Synopsys, Inc. can complete its $35 billion acquisition of Ansys, Inc. subject to the divestiture of certain assets to resolve antitrust concerns. The announcement represents the first formally approved divestiture to resolve antitrust concerns under the new Trump administration and reflects a return to traditional remedies. This is distinct from the approach under the Biden administration, which was skeptical of nearly all remedies, preferring to challenge deals in court rather than settle.
In an accompanying joint statement explaining the decision, the Commissioners relayed their belief that “remedies must be an option for the FTC as it fulfills its mission of protecting competition” and that “settlement maximizes the Commission’s finite enforcement resources.” Additionally, the proposed consent order does not include prior approval or prior notice provisions – another meaningful departure from the Biden administration which viewed such provisions as a deterrence tool. The divestiture package and accompanying statement was approved unanimously by the three sitting Republican appointees.
FTC Scrutiny of Synopsys/Ansys
In January 2024, Synopsys announced a definitive agreement to acquire Ansys. After an extended antitrust investigation, the FTC sued to block the deal, alleging the transaction would substantially lessen competition in three markets: optical software tools, photonic software tools for designing and simulating photonic devices, and RTL power consumption analysis tools. The FTC stated that the merging parties were often the only two suppliers and the combined merger would leave customers with limited alternatives in markets with high barriers to entry. The FTC also claimed the transaction would lead to a loss of innovation competition, as the companies had a history of developing products in direct response to each other’s innovations.
A Successful Remedy
Alongside the complaint, the FTC announced a proposed consent order to resolve competition concerns. The proposed consent requires the parties to divest the problematic businesses to Keysight Technologies, Inc. (“Keysight”). The remedy includes two software products from Synopsys and a power consumption analysis tool from Ansys. As a part of the divestiture, Synopsys and Ansys will provide Keysight limited transition services and technological support.
While this is an encouraging development for parties looking to resolve antitrust concerns with a remedy package, the FTC remains “clear-eyed about the dangers of inadequate or unworkable settlements.” Generally, the Agency prefers settlements that include “a standalone or discrete business, or something very close to it, along with all tangible and intangible assets necessary (1) to make that line of business viable, (2) to give the divestiture buyer the incentive and ability to compete vigorously against the merged firm, and (3) to eliminate to the extent possible any ongoing entanglements between the divested business and the merged firm.” FTC Chairman Ferguson has clarified that in the absence of an effective remedy, “[w]hen confronted with an anticompetitive merger, I will favor litigation to guarantee that competition will be protected rather than accepting an uncertain settlement.”
Keysight’s credibility as a buyer likely played a key role in the FTC approving the remedy. The FTC has previously criticized divestiture buyers where they lack a strong track record in scaling businesses, limited experience in the product area, and little to no industry knowledge or financial resources to innovate and scale the products. Keysight’s global operations and expertise in software testing, including with products being acquired from Synopsys, and measurement made it an acceptable divestiture buyer. The FTC explained Keysight “has a long track record of acquiring assets in related markets and making them successful, as well as the financial resources to compete effectively after the divestiture.”
Agency Leadership Policy in Action
Current FTC and DOJ leadership have consistently stated that – as a policy matter – the Agencies would consider remedies where they make sense and would resolve competition concerns. DOJ Assistant Attorney General (“AAG”) Gail Slater has been vocal in her support for “effective and robust structural remedies,” explaining the DOJ will likely be more open to settlements in merger cases where remedies “can be implemented without excessively burdening the Antitrust Division’s resources.” FTC Chairman Andrew Ferguson stated: “I think a very realistic approach to remedies where we, the agencies, accept remedies when we’re quite confident that they will be successful helps block more anticompetitive conduct and protect more Americans.” In their joint statement the Commissioners explained that the FTC will have a “strong preference” for “structural remedies over conduct remedies” and any behavioral remedies will “be treated with substantial caution” moving forward.
Agency leadership has also emphasized their intent to walk back practices they believe were overreach under the Biden administration. One such practice may be including prior approval or notice provisions in consent orders. A prior approval provision requires merging parties to obtain prior approval (often for long time periods) from the FTC before closing any future transaction affecting each relevant market for which a violation was alleged. In 1995, the FTC had issued a bipartisan policy statement rescinding the practice of broadly incorporating these provisions in Commission consent orders. Under the Biden administration in 2021, the FTC reinstated this practice and used these provisions regularly despite criticism that it potentially deterred future M&A as a result. In the Synopsys/Ansys consent order, the FTC opted not to include a prior approval or notice provision.
The Synopsys/Ansys consent order is an encouraging sign for merging parties that remedies are again an efficient way to resolve competitive concerns and without the strings of prior approval attached. A joint statement by FTC previewed: “[T]his will not be the Commission’s last word on the subject. In due course, the Commission will publish a policy statement on its understanding of the role of remedies.”
Laying the Groundwork for Closing Scrutinized Deals
For transactions that may raise competition issues, Synopsis/Ansys demonstrates that the agencies are again willing to accept adequate solutions that address their concerns. This should be good news for dealmakers with generally unproblematic deals that could be remedied to resolve potential harms. Under the prior enforcement regime, dealmakers needed to be prepared to defend those remedies in court, and many were unwilling to withstand the time and cost of doing so, often deterring M&A activity. Companies should seek antitrust advice early if a transaction may have antitrust risk to consider potential engagement strategies and solutions, including remedies. As relayed by the FTC: “The upshot of today’s Commission action for the American people and business community is that the Commission is willing to consider settlements in merger cases.”
Key Takeaways
- Remedy scope. This formally approved divestiture signals a return to structural remedies in antitrust enforcement and supports previous public indications provided by FTC/DOJ leadership. But the FTC has made clear that any divestiture package must be complete to resolve competition concerns.
- Prior approval / notice provisions. The absence of a prior approval or notice provision in Synopsys/Ansys indicates a potential reversion to traditional policy whereby these provisions were only included in certain circumstances as deemed necessary by the FTC/DOJ based on a specific competitive concern.
- Scrutinized transactions are still getting done. Despite the rhetoric from both antitrust agencies critical of larger deals leading to increased industry consolidation, particularly in the technology sector, staff continues to conduct thorough investigations and the new administration now appears open to exploring potential paths forward that resolve competition concerns while allowing the broader transaction to close.
- Remedies remain a final resort. The FTC’s recent announcement means that remedies/divestiture packages may allow deals to close, but they still remain a final resort in many cases and are a point to plan for, but not necessarily lead with, in agency advocacy.
