Cadence Design announced on Thursday that it will acquire the design and engineering business of Stockholm-based Hexagon AB in a deal valued at €2.7 billion ($3.16 billion). The move aims to expand Cadence’s customer base and strengthen its product portfolio.
Under the agreement, Cadence will pay 70 percent of the amount in cash, while the remaining will be settled by issuing shares to Hexagon.
Cadence, a US-based chip design software provider, counts major chipmakers including Nvidia and Qualcomm among its customers. The company is widely known for its electronic computer-aided design software, which is critical in creating chips and ensuring they are free of errors.
Hexagon’s design and engineering unit offers computer-aided engineering software solutions with strong products in structural and multibody dynamics simulation. In 2024, the business reported revenues of nearly €265 million and employs more than 1,100 people globally.
The deal will also allow Cadence to serve a wider customer base, including leading aerospace and automotive companies such as Volkswagen Group, BMW, and Lockheed Martin, all of which use Hexagon’s solutions.
The transaction is expected to be completed in the first quarter of 2026. If the deal does not go through, Cadence has agreed to pay Hexagon a reverse termination fee of up to €175 million.
This acquisition follows Cadence’s purchase in 2024 of BETA CAE Systems for $1.24 billion in cash and stock. That deal added advanced software for analysing car and jet engine designs to its portfolio, further strengthening its position in the engineering software market.
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