Cadence to acquire Hexagon’s design and engineering unit for $3.16 billion

Cadence, a major supplier of electronic design automation tools to chipmakers like Nvidia and Qualcomm, said acquiring Hexagon’s D&E unit will extend its reach beyond semiconductors and strengthen its position in aerospace and automotive markets

U.S.-based chip design software leader Cadence Design Systems announced on Thursday (September 4) that it will acquire the design and engineering (D&E) division of Stockholm-based Hexagon AB in a deal valued at €2.7 billion ($3.16 billion).

Under the terms, Cadence will pay 70% of the amount in cash and issue the remaining consideration in shares to Hexagon. The transaction, subject to regulatory approvals, is expected to close in the first quarter of 2026. If the deal falls through, Cadence may be liable for a reverse termination fee of up to €175 million.

Expanding market reach

Cadence, a key supplier of electronic design automation (EDA) tools to major chipmakers including Nvidia and Qualcomm, said the acquisition will help it broaden its customer base beyond semiconductors. By integrating Hexagon’s D&E unit, which specializes in computer-aided engineering (CAE) solutions such as structural and multibody dynamics simulations, Cadence aims to deepen its presence in aerospace and automotive markets.

Hexagon’s D&E unit generated revenues of €265 million in 2024 and employs more than 1,100 staff globally. Its customer roster includes Volkswagen Group, BMW, and Lockheed Martin.

The acquisition follows Cadence’s 2024 purchase of BETA CAE Systems for $1.24 billion, which strengthened its offerings in automotive and aerospace simulation software. Cadence said the latest deal reflects its strategy to build a comprehensive portfolio spanning chip design, engineering simulation, and system-level verification.