(CTN News) – AVGO-Q, a US chip maker, is expected to gain conditional EU antitrust approval for its $61.8 billion acquisition of VMware VMW-N, a cloud computing firm. Broadcom shares are up almost five percent as a result.
According to people familiar with the matter, the European VMware Commission approved Broadcom’s deal on the condition that it implement remedies that would address Broadcom’s interoperability problems with rivals.
There have been no comments from either the EU antitrust watchdog or Broadcom about the deal, which is scheduled to be decided by July 17.
It is reported that Broadcom shares rose by as much as 5 percent in early trade and were up by as much as 4.9 percent at 1700 GMT. The share price of VMware increased by 2.7%.
There is one remedy that focuses on Fibre Channel Host-Bus Adapters (FC HBAs), one of which is aimed at Marvell Technology, a rival for the FC HBA market. I contacted Marvell Technology for a comment, but the company did not respond.
A FC HBA (Fibre VMware Channel Host Bus Adapter) is a component that connects servers to storage located outside the server using the fibre channel protocol on a storage area network in the form of a switch. In the FC HBA market, Broadcom is one of the leading suppliers.
There is another key hurdle for Broadcom in Britain, where the British competition authority will announce its findings next month regarding the deal and the possibility of remedies, if any, if necessary.
There has been an increase in companies’ distrust towards the Competition and VMware Markets Authority (CMA) following its decision to block Microsoft’s Activision deal while the European Union cleared it.
As part of its investigation into Broadcom’s acquisition of VMware, the US Federal Trade Commission is also investigating it.
As part of a plan to diversify into enterprise software, Broadcom, which specializes in network chips used in data centres and specialized chips that speed up artificial intelligence work, announced this deal, its biggest, last year.