US chipmaker Broadcom is expected to receive conditional antitrust clearance from the EU for its proposed $61 billion (nearly Rs.5.03 trillion) acquisition of cloud-computing company VMware, according to people familiar with the matter its shares rose nearly 5 percent.
The European Commission’s approval is conditional on remedies related to Broadcom’s interoperability with competitors, which would address competition concerns, the people said.
Both the EU antitrust regulator, which is scheduled to decide on the deal by July 17, and Broadcom declined to comment.
Broadcom shares are up as much as 5 percent in early trade and are up 4.9 percent in the evening. VMware grew 2.7 percent.
One of the mitigations is focused on Fiber Channel host-bus adapters (FC HBAs) and is targeting competitor Marvell Technology, one respondent said. Marvell Technology did not respond to a request for comment.
FC-HBAs are storage adapters that use the Fiber Channel protocol to connect servers to storage outside the server on a storage area network, typically through a switch. Broadcom is a leading provider of FC HBAs.
The other major hurdle for Broadcom lies in the UK, where next month the UK competition regulator will announce its preliminary findings on the deal and possible remedies, if any.
Businesses have become wary of the Competition and Markets Authority (CMA) after it blocked Microsoft’s Activision deal while the EU approved it.
The US Federal Trade Commission is also investigating Broadcom’s acquisition of VMware.
Broadcom, which supplies chips for data center connectivity and specialty chips that speed up AI work, announced the biggest deal to diversify into enterprise software last year.
© Thomson Reuters 2023