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Cadence Design to Acquire Hexagon’s Engineering Unit for $3.16 Billion

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Cadence Design Systems (CDNS.O) announced on Thursday that it will acquire the design and engineering (D&E) business of Sweden’s Hexagon AB (HEXAb.ST) for €2.7 billion ($3.16 billion). The U.S.-based chip design software leader will finance the deal with 70% cash and 30% in newly issued shares to Hexagon.

Cadence, whose clients include Nvidia and Qualcomm, is a global leader in electronic computer-aided design (ECAD) tools that underpin chip development and verification. By acquiring Hexagon’s D&E unit, which specializes in structural and multibody dynamics simulation, Cadence will expand into adjacent markets such as aerospace and automotive engineering.

Hexagon’s D&E division generated nearly €265 million in revenue in 2024 and employs over 1,100 people worldwide. Its customer roster includes industry heavyweights such as Volkswagen Group, BMW, and Lockheed Martin, providing Cadence with a stronger foothold in the automotive and aerospace sectors.

The deal builds on Cadence’s acquisition of BETA CAE Systems in 2024 for $1.24 billion, further strengthening its simulation and engineering software capabilities. The Hexagon transaction is expected to close in Q1 2026, subject to regulatory approval. Cadence has agreed to pay a reverse termination fee of up to €175 million if the deal falls through.

With this acquisition, Cadence is positioning itself as not only a key player in semiconductor design software but also as a broader engineering solutions provider, extending its reach beyond chips into high-performance industries reliant on advanced simulations.

U.S. Senator Tom Cotton Questions Intel CEO Lip-Bu Tan’s Ties to China in Letter to Board Chair

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Republican Senator Tom Cotton sent a letter on Wednesday to Intel’s board chair, Frank Yeary, raising concerns about new CEO Lip-Bu Tan’s connections to Chinese firms and a criminal case linked to Tan’s former company, Cadence Design. Cotton questioned Intel’s board about its awareness of subpoenas issued to Cadence during Tan’s leadership and asked what steps were taken to address potential security risks.

The letter probes whether Tan was required to divest from Chinese chip companies with ties to the Chinese military or Communist Party, given Intel’s involvement in the U.S. government’s Secure Enclave program — an initiative under the Biden administration to secure microelectronics supply for national defense. Cotton emphasized Intel’s responsibility to safeguard American taxpayer funding and questioned if Tan’s affiliations might compromise Intel’s national security obligations.

Intel responded by affirming its and Tan’s commitment to U.S. national security and pledged to address the senator’s concerns directly.

Earlier reporting revealed that between 2012 and 2024, Tan or venture funds he managed invested at least $200 million in hundreds of Chinese advanced manufacturing and chip firms, some linked to China’s military. While a source said Tan had divested some holdings, public databases still listed many investments as current.

In related news, Cadence Design agreed last week to plead guilty and pay over $140 million to settle charges for selling chip design software to a Chinese military university allegedly involved in nuclear blast simulation. These sales occurred under Tan’s tenure as CEO (2008–2021) and executive chairman until 2023.

Cotton’s letter cited the Reuters investigation into Tan’s Chinese ties and underscored the heightened scrutiny Intel faces due to its federal funding under the Secure Enclave program.