(Reuters) - UK's competition watchdog said on Monday it was looking into whether chip design software maker Synopsys' ( SNPS ) $35 billion acquisition of Ansys ( ANSS ) would affect competition in Britain.

The Competition and Markets Authority (CMA) is yet to launch a formal investigation into the deal.

CONTEXT

In January, chip design software maker Synopsys ( SNPS ) revealed its plan to acquire Ansys ( ANSS ), whose software is used in creating a wide range of products, from aeroplanes to tennis rackets used by players like Novak Djokovic, in a $35 billion cash-and-stock deal.

WHY IT'S IMPORTANT

Synopsys ( SNPS ) specializes in creating tools for chip design, which complements Ansys's ( ANSS ) software for evaluating broader electronic systems that incorporate these chips.

However, the proposed merger has raised concerns among analysts about potential regulatory challenges in the already consolidated business software sector.

In May, Synopsis, which collaborates with major chipmakers like including Taiwan Semiconductor Manufacturing Co ( TSM ) and Intel ( INTC ) said that Chinese regulators had requested their cooperation in scrutinizing the deal.

WHAT'S NEXT

Based on comments received during its information-gathering process, the watchdog will either refer the deal to a phase 1 probe or clear it of all competition concerns.