The Federal Trade Commission (FTC or Commission) recently announced that it will require Synopsys, Inc. (Synopsys) and Ansys, Inc. (Ansys) (together, “the parties”) to divest certain assets to resolve antitrust concerns surrounding the parties $35 billion merger.1 The Proposed Order is the first instance of the Commission clearing a merger subject to a remedy under the new Trump Administration. The Commission’s willingness to resolve competitive concerns about a merger through divestiture confirms the return to the status quo—before the Biden Administration and FTC Chair Lina Khan—where parties to a merger may work with the FTC to find a structural solution that resolves the anticompetitive concerns presented by a merger while preserving its procompetitive benefits.
The Complaint and Proposed Order
The FTC alleges harm in three markets—optical software tools, photonic software tools for designing and simulating photonic devices, and RTL power consumption analysis tools—where the parties closely compete. To alleviate concerns that the merger would lead to higher prices and degrade quality and innovation, the Proposed Order requires that:
- Synopsys divest to Keysight Technologies, Inc. (Keysight) its optical software tools and photonic software tools.
- Ansys divest its power consumption analysis tool, called PowerArtist, to Keysight.
In addition to divestiture of assets, the Proposed Order contains provisions targeted at preserving competition in the affected labor markets:
- The Proposed Order requires the parties to assist Keysight in hiring relevant employees from the business units responsible for the divestiture assets.
- The Proposed Order prohibits (for three years) the parties’ solicitation of employees that moved to Keysight to work in the divestiture businesses.
- With certain limited exceptions, the Proposed Order also prohibits the parties from enforcing non-compete / non-solicit provisions or agreements against employees who seek employment or obtain a position at Keysight working on the divestiture businesses.
A monitor will be appointed to ensure compliance with the consent decree. There are several other provisions (and the absence of a Biden-era provision) that are noteworthy:
- If Keysight determines more assets are needed to support the Proposed Order, the Commission, at its sole discretion, may order further divestitures.
- Synopsys is prohibited from reacquiring any of the divestiture assets for a period of 10 years—which is also the term of the order.
While the provision against reacquisition is standard in consent decrees at the FTC, what’s notable is that this Proposed Order does not contain the prior approval language instituted in Biden-era Proposed Orders, which required merging parties under order to obtain prior approval from the FTC before closing any future transaction in the relevant market.2
Key Takeaways from Chair Andrew Ferguson’s Statement Joined by Commissioner Melissa Holyoak and Commissioner Mark R. Meador In the Matter of Synopsys, Inc. / Ansys, Inc.
Chair Andrew Ferguson’s Statement presents a clear policy in favor of remedies.
Appreciating the stark policy contrast with the prior administration, Chair Ferguson issued a statement3 (joined by Commissioners Mark Meador and Melissa Holyoak) which provides guidance about how the FTC will engage in remedial action with respect to merger enforcement. Chair Ferguson also notes that where litigation is appropriate the Commission will challenge the merger in court. However, the FTC’s willingness to consider remedies even where it believes it would prevail in litigation, suggests that litigation to block mergers will be pursued with discretion by this Commission.
The FTC’s position acknowledges that investment through acquisition drives innovation.
Chair Ferguson’s statement acknowledges that mergers can sometimes result in increased prices, quality degradation, and diminished innovation where they eliminate competition as well as reduction of consumer choice and competition for labor; however, those possibilities must not lead to blanket opposition of mergers without also considering the benefits—for example, mergers as a mechanism for investment in innovation.
The statement explains that if an acquisition by a larger company is not a realistic potential exit strategy, investors incentives to invest will be dampened, leading to less innovation and stunted development of new technology and economic growth. Additionally, for businesses that are underperforming, an acquisition has the potential to improve the firm’s competitive positioning and output. This may indicate the FTC is likely to be more lenient than it has in the past when considering a merger where the target is flailing or in financial distress.
The FTC is open to remedies in cases where the proposed solution will appropriately remedy the alleged anticompetitive harms.
Chair Ferguson affirmed that the Commission will accept proposed structural remedies where the divestiture buyer has everything it needs to be a viable competitor on day one of the divestiture. To this end, the Commission will continue to favor structural remedies of stand-alone businesses opposed to a mix and match of assets that have never been operated as a single unit.
Chair Ferguson notes the Commission remains cognizant of past divestitures that failed for lack of resources and support. Thus, the Commission will continue to litigate enforcement actions where the proposed remedy cannot guarantee that robust competition will continue.
The FTC is open to remedies that allow the procompetitive aspects of a merger to proceed while addressing perceived anticompetitive harms.
Taking issue with his predecessor’s hostile rhetoric and position regarding mergers and acquisitions, Chair Ferguson’s statement notes that litigation to block a merger in its entirety solves for the likely anticompetitive effects, but also prohibits any potential procompetitive effects to which consumers may be entitled.
The FTC has limited resources and remedies help preserve them.
Chair Ferguson’s statement details the significant resource constraints of the Commission, which are exacerbated when litigation is pursued. Concerned with the cost and uncertain nature of litigation, the statement makes clear that remedies are simply cheaper than litigation.
Instead, as articulated in the statement, entering a consent decree where a structural remedy exists allows the Commission to focus its enforcement efforts on mergers that have no viable path to remedy and that the Commission must defend in court.
Hostility to remedies leads to adverse consequences.
In recent years, the antipathy shown towards remedies has led merging parties to locate a buyer for assets (without entering a consent decree with the Commission) before submitting their pre-merger notifications to the Commission for review. Chair Ferguson notes that those so-called remedies may not fully address the concerns and are devoid of input from the Commission who may be better able to guide the parties on a suitable alternative that ensures robust competition remains post-merger.
Where the Commission is involved in the process via a formal remedy, it can ensure a solution that works for both the parties and the Commission. Absent this working relationship, the Commission is often forced to litigate to block the merger since the fix is inadequate. Chair Ferguson states that litigating the fix often is a challenging posture for the Commission who must convince the court that the remedy does not solve the anticompetitive concerns. In short, he explains, litigating the fix shifts the considerations about what constitutes an acceptable remedy to the court from the Commission’s expertise.
The FTC views remedies as an important enforcement tool.
Chair Ferguson closes the statement by acknowledging that every litigation the Commission brings results in less resources to challenge other merger cases or anticompetitive conduct. Given this tradeoff, the Commission sees remedies as an important tool to ensure resources are allocated appropriately and efficiently. In short, the FTC cannot litigate every single merger, nor should it. Remedies can often solve concerns just as effectively, if not more so, than litigation and with a Commission ordered remedy there is a level of certainty that does not exist otherwise.
[1] Synopsys announced its proposed acquisition of Ansys in January 2024 and the transaction, in addition to a lengthy FTC review, was also subject to a lengthy review in the European Union, United Kingdom, Japan, South Korea, and China.
[2] See, Ice and Black Knight Consent Decree Section XI. Respondents Prior Approval (“Respondents shall not, without prior approval of the Commission, acquire directly or indirectly, through subsidiaries or otherwise, any leasehold, ownership interest, or any other interest, in whole or in part, in any business that owns or sells an LOS”) available at https://www.ftc.gov/system/files/ftc_gov/pdf/D09413ICEBKFinalOrderPublic.pdf.
[3] Statement of Chairman Andrew N. Ferguson Joined by Commissioner Melissa Holyoak and Commissioner Mark R. Meador In the Matter of Synopsys, Inc. / Ansys, Inc. Matter Number 2410059 (May 28, 2025) available at, https://www.ftc.gov/system/files/ftc_gov/pdf/synopsys-ansys-ferguson-statement-joined-by-holyoak-meador.pdf.
