Broadcom Assured To Win EU Approval For $61 Billion VMware Deal

CIOTechOutlook Team | Tuesday, 13 June 2023, 03:53 IST

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As per persons familiar with the situation, US chipmaker Broadcom is expected to receive conditional EU antitrust permission for its proposed $61 billion acquisition of cloud computing company VMware, pushing its shares up by about 5%.According to the sources, the European Commission's approval is contingent on Broadcom taking steps to address competition concerns regarding its ability to communicate with rivals.
 
Both Broadcom and the EU antitrust enforcer, which must make a decision on the merger by July 17, declined to comment.At 1700 GMT, shares of Broadcom were up 4.9% after rising as high as 5% in early trading. VMware saw a 2.7% gain.
 
According to sources, one of the solutions targets Marvell Technology's rival FC Host-Bus Adapters (HBAs). A request for comment was not answered by Marvell Technology.FC HBAs are storage adapters that use the fibre channel protocol to link servers to storage outside of the server on a storage area network, generally through a switch. One of the top manufacturers of FC HBAs is Broadcom.
 
The second significant obstacle for Broadcom is in the United Kingdom, where the British Competition Agency will reveal its preliminary findings concerning the merger and any remedies if necessary next month. Since the Competition and Markets Authority (CMA) rejected Microsoft's Activision merger while the EU approved it, businesses are warier of the CMA.
 
The purchase of VMware by Broadcom is also under investigation by the American Federal Trade Commission.
 
Broadcom, a supplier of networking and specialty chips that speed up AI work for data centres, announced the contract, which is its biggest, last year to expand into corporate software.
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