Synopsys is buying Ansys in a cash-and-stock deal valued at approximately $35 billion, the first big buyout attempt of the year that would join two big automation and engineering software companies.

Ansys shareholders will receive $197 in cash and 0.3450 shares of Synopsys common stock for each Ansys share.

“This transformative combination brings together each company’s highly complementary capabilities to meet the evolving needs of today’s engineers and give them unprecedented insight into the performance of their products,” Ansys CEO Ajei Gopal said in a prepared statement today.

The companies said that their businesses complement one another and the acquisition will enhance Synopsys’ Silicon to Systems strategy both across the core electronic design automation segment and in other areas such as automotive, aerospace and industrial, where Ansys has an established presence and successful go-to-market experience.

Ansys is heavily involved in automotive, aerospace and defense, construction, energy, materials and chemical processing. The biggest customers for Synopsys include Advanced Micro Devices and Intel, designing chips for a multitude of sectors.

Analysts with Baird this month pointed out tremendous growth in the sector, highlighting Synopsys. Shares of both companies have soared this year with significant advances in artificial intelligence, particularly Synopsys.

The deal could point to strengthening sentiment for big acquisitions in tech, potentially setting the stage for more buyouts in 2024.

The two companies hac already been working closely together for about seven years, which Synopsys CEO Sassine Ghazi called a “partnership.”

Shareholders of Ansys, based in Canonsburg, Pennsylvania, just outside of Pittsburgh, are expected to own about 16.5% of the combined company.

The deal is expected to close by the first half of 2025. It still needs approval from Ansys shareholders.