UK watchdog says $35 billion Synopsys-Ansys deal raises competition concerns

(Reuters) -UK's competition watchdog said on Friday chip design software maker Synopsys' $35 billion acquisition of Ansys could reduce innovation and lead to higher prices but that it could approve the deal if those concerns are resolved.

The Competition and Markets Authority (CMA) said after its initial Phase 1 probe that the deal raises competition worries in the supply of semiconductor chip design and light-simulation products in the UK.

The watchdog said the merger could reduce choice for customers and could lead to a loss of innovation, lower quality software and higher prices which might be passed onto UK businesses and consumers.

"Semiconductor chips are crucial components in technologies used every day by UK consumers and also in key sectors including artificial intelligence and cloud computing," the CMA said.

The companies now have the opportunity to submit proposals to address the regulator's concerns and if suitable proposals are not submitted, it will progress to an in-depth probe, the CMA said.

Synopsys and Ansys did not immediately respond to Reuters' requests for comment.

(Reporting by Aby Jose Koilparambil and Prerna Bedi in Bengaluru; Editing by Maju Samuel)