In any early indication the new FTC administration will be “friendlier” to merging companies, the FTC announced Wednesday a settlement of a merger that includes a divestiture, and along with it a statement supporting structural remedies to challenged mergers.  

The three Commissioners voted unanimously to both issue a complaint against the merger of Synopsis and Ansys and announce a settlement on the same day, indicating the companies were negotiating with the FTC during the investigation period. 

Under the proposed consent order, Synopsys will divest its optical software tools, such as LED screens, mirrors, and lenses, as well as its photonic software tools, which include fiber optic cables and solar panels. In addition, Ansys will divest a power consumption analysis tool, called PowerArtist, which is used to measure and optimize the power consumption of digital chips at an early stage of the design stage, known as Register Transfer Level (RTL) design. Both Synopsys and Ansys will divest their assets to Keysight Technologies, Inc.

In an accompanying statement, Chairman Ferguson made clear that this administration's FTC is willing to accept structural remedies to merger challenges where “it involves the sale of 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 to the extent possible any ongoing entanglements between the divested business and the merged firm.” He noted all of those criteria were met in this case. He also promised that the “ Commission will publish a policy statement on its understanding of the role of remedies.” At the same time, Commissioner Ferguson also promised to litigate an anticompetitive merger “to guarantee that competition will be protected rather than accepting an uncertain settlement.”

Future cases will provide more guidance, as well as the promised policy statement. Companies seeking to merge should consult antitrust counsel and give serious thought to whether they can proposed an upfront remedy that satisfies this new FTC.