China's market regulator has conditionally approved the acquisition of simulation software company Ansys by U.S. software firm Synopsys', the State Administration for Market Regulation said on Monday.

Synopsys shares jumped 3.7% in premarket trading on Monday, while Ansys rose 1.2%.

The approval comes after the United States lifted restrictions on exports to China for chip design software developers earlier this month, allowing companies, including Synopsys, to restore access to their software and technology for Chinese customers.

The Chinese regulator said it approved the deal based on restrictive commitments submitted by the companies, requiring the merged entity to fulfil several obligations.

The conditions require the companies to honour existing customer contracts, including pricing and service terms, and continue supplying electronic design automation products to Chinese customers on fair and non-discriminatory terms.

The companies will also be required to maintain existing interoperability agreements and renew them on request from Chinese customers.

Synopsys, which makes EDA tools for chip design, announced the $35 billion cash-and-stock deal for Ansys in early 2024. The transaction has faced antitrust scrutiny in major markets, though some authorities, including Britain, have already granted approval.