US chipmaker Broadcom is set to gain conditional EU antitrust approval for its $61 billion (nearly Rs. 5,03,000 crore) proposed acquisition of cloud computing firm VMware, people familiar with the matter said, sending its shares up by almost 5 percent.
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 percent in early trade and were up 4.9 percent at evening. VMware was up 2.7 percent.
One of the remedies focuses on Fibre Channel Host-Bus Adapters (FC HBAs) and is targeted at rival Marvell Technology, 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.
The US 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.
© Thomson Reuters 2023