Fair Trade Commission headquarters in Sejong / Courtesy of Fair Trade Commission

Korea's antitrust regulator on Thursday approved the proposed merger of U.S. chip design software giant Synopsys and engineering software firm Ansys on the condition the companies divest their assets in overlapping business areas, officials said.

The Fair Trade Commission (FTC) made the decision about 10 months after Synopsys filed a request for approval of its $35 billion deal to buy Ansys, according to the officials.

The FTC, however, demanded the two companies sell their overlapping business units, such as register transfer-level power consumption analysis software, as well as optics and photonics software, within six months after their integration is completed.

The FTC said it gave such conditions-based approval as the acquisition is expected to leave the integrated company with a 60 to 80 percent share in the global register market, 90 to 100 percent share in the optics market and 55 to 75 percent share in the photonics market, undermining competition in those markets.

Prior to the FTC's decision, the European Union, Britain and Japan have given similar conditional approvals for the integration plan.

Regulators of the United States, China, Taiwan and Turkey are still reportedly reviewing the matter.

If finalized, the merger between Synopsys and Ansys will be the biggest acquisition in the technology sector since chipmaker Broadcom's takeover of software maker VMware in 2023.

"This case serves as a precedent for preventing potential harm to domestic semiconductor chipmakers, such as Samsung Electronics and SK hynix, which are in fierce international competition amid the rise of the artificial intelligence chip market and supply chain restructuring," said Lee Byung-geon, head of the mergers and acquisitions review bureau at the FTC.

Lee said the FTC's decision will not affect trade relations with the U.S. as it is a matter of protecting market order and fair competition in Korea. (Yonhap)