New Delhi, India, September 5, 2025— Cadence Design Systems has confirmed it will acquire the design and engineering (D&E) division of Swedish tech firm Hexagon AB for €2.7 billion, or roughly $3.16 billion. The U.S.-based company shared the news on Thursday and expects the deal to close in the first quarter of 2026.
This acquisition stands among the largest in Cadence’s history and marks a significant step in its plan to grow beyond electronic design automation (EDA) software. Headquartered in San Jose, California, Cadence currently serves top chipmakers such as Qualcomm and Nvidia. With this deal, it aims to enter the broader computer-aided engineering (CAE) field and offer solutions to industries like automotive, aerospace, and manufacturing.
Cadence has agreed to pay 70 percent of the purchase price in cash. The remaining 30 percent will be covered through newly issued Cadence shares. If the deal does not go through, Cadence has committed to pay Hexagon a reverse termination fee of up to €175 million.
Hexagon’s D&E division provides simulation tools that test how mechanical systems perform under various stress and motion conditions. These tools support critical engineering tasks such as structural analysis and multibody dynamics. In 2024, the division earned nearly €265 million in revenue and employed more than 1,100 people globally.
Through this acquisition, Cadence will add customers from major global companies, including BMW, Volkswagen, and Lockheed Martin. These manufacturers use Hexagon’s tools to optimize the performance and safety of their products. By integrating these capabilities, Cadence will offer a wider range of design and simulation solutions that span electronics and mechanical engineering.
“This acquisition is a strategic leap forward,” said Cadence CEO Anirudh Devgan. “It allows us to serve a broader range of industries and deliver more integrated solutions that combine electronics and mechanical systems.”
The move follows Cadence’s 2024 acquisition of BETA CAE Systems for $1.24 billion. That earlier deal brought in simulation technology used in automotive and aerospace design, particularly in areas like vehicle crash testing and jet engine modeling. Together, these two acquisitions position Cadence to become a comprehensive provider of digital engineering tools.
Experts in the industry believe Cadence is responding to key shifts in product development. As engineering projects grow more complex and delivery schedules become tighter, manufacturers rely more heavily on digital simulation to test and refine their designs. This trend reduces reliance on physical prototypes, saving time and money while improving accuracy.
One industry analyst commented, “Cadence is making a smart bet on the future of design. Merging its EDA expertise with Hexagon’s mechanical simulation tools gives it a competitive edge in delivering end-to-end engineering solutions.”
Meanwhile, Hexagon will use the sale to focus more closely on its strategic priorities. The company plans to reinvest the proceeds into its core offerings, which include digital reality technologies and autonomous systems. This decision supports Hexagon’s long-term goal of concentrating on high-growth, high-impact sectors.
As integration begins, Cadence plans to retain Hexagon’s engineers and include them in its global operations. Cadence values the team’s expertise and therefore aims to ensure a smooth transition for its existing customers.
In addition, Cadence will work to preserve relationships with Hexagon’s current clients. Cadence plans to maintain service levels and, at the same time, enhance offerings by integrating simulation tools more deeply.
This acquisition goes beyond a simple business expansion. It signals a transformation in how Cadence views its role in the design and engineering world. For decades, the company focused primarily on supporting chipmakers. Now, it is evolving into a broader technology provider with tools that help develop everything from microchips to airplanes.
As industries shift toward smarter, interconnected products, the need for unified design platforms is becoming more urgent. Cadence is preparing to meet that demand by offering a full suite of digital tools under one umbrella.
In summary, this deal with Hexagon sets Cadence on a new path. It shows a broader strategy to adapt to global industry needs and stay competitive as integrated digital engineering becomes standard.
