Broadcom set to win EU nod for $61 bln VMware deal, sources say

VMware

12/06/2023 18:09

(Adds Broadcom and VMware shares in paragraphs 1, 4, UK and FTC
probes in paragraphs 7-9)
    By Foo Yun Chee
       BRUSSELS, June 12 (Reuters) - U.S. chipmaker Broadcom
 AVGO.O  is set to gain conditional EU antitrust approval for
its $61 billion proposed acquisition of cloud computing firm
VMware  VMW.N , people familiar with the matter said, sending
its shares up by almost 5%. 
    The European Commission's clearance is tied to remedies
relating to Broadcom's interoperability with rivals that would
address competition concerns, the people said.
    Both the EU antitrust watchdog, which is scheduled to decide
on the deal by July 17, and Broadcom declined to comment.
    Broadcom shares rose as much as 5% in early trade and were
up 4.9% at 1700 GMT. VMware was up 2.7%.
    One of the remedies focuses on Fibre Channel Host-Bus
Adapters (FC HBAs) and is targeted at rival Marvell Technology
 MRVL.O , one of the people said. Marvell Technology did not
respond to a request for comment.
    FC HBAs are storage adapters that connect servers to storage
located outside the server on a storage-area network using the
fiber channel protocol, typically through a switch. Broadcom is
a leading supplier of FC HBAs.
    Broadcom's other key hurdle is in Britain where the British
competition agency will next month announce its provisional
findings about the deal and possible remedies if required.
    Companies have become more wary about the Competition and
Markets Authority (CMA) after it blocked Microsoft's Activision
deal while the EU cleared it.
    The U.S. Federal Trade Commission is also investigating
Broadcom's VMware acquisition.  
    Broadcom, which supplies chips used in data centres for
networking and specialised chips that speed up AI work,
announced the deal, its biggest, last year to diversify into
enterprise software.

 (Reporting by Foo Yun Chee; Editing by Kirsten Donovan and
Conor Humphries)
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