The European Commission yesterday approved US chipmaker Broadcom Inc’s planned US$61 billion takeover of cloud computing firm VMware Inc, conditional on the company fulfilling certain commitments to ease competition concerns.
The massive deal had raised concerns about competition, prompting probes by antitrust watchdogs in the EU and the UK.
The commission said its in-depth investigation found that the transaction, as originally proposed, “would harm competition in the worldwide market for the supply” of Fibre Channel host bus adapters (FC HBA).
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As a remedy, Broadcom offered interoperability commitments to rival Marvell Technology Group Ltd and any other potential competition, the EU’s executive arm said.
It also guaranteed access to the source code for all of its current and future FC HBA drivers.
The commission concluded that “the proposed acquisition, as modified by the commitments, would no longer raise competition concerns.”
The UK’s Competition and Markets Authority (CMA) in March decided to deepen its probe into the mega-merger.
Broadcom is seeking to expand into the software market to boost its server business and has acquired two complementary firms, CA Technology and Symantec Corp.
Separately, the CMA yesterday said that it would not accept new remedies from Microsoft Corp and Activision Blizzard Inc after it blocked their merger, but it would consider a restructured deal, which could require a fresh investigation.
Having blocked the US$69 billion deal in April, the competition watchdog has since said that it would consider new proposals for the deal after a US court ruling that the takeover could go ahead.
“Whilst merging parties don’t have the opportunity to put forward new remedies once a final report has been issued, they can choose to restructure a deal, which can lead to a new merger investigation,” the CMA said.
“Microsoft and Activision have indicated that they are considering how the transaction might be modified, and the CMA is prepared to engage with them on this basis,” it said.
The tech giant’s deal to buy Activision is its largest ever and the biggest in gaming history.
Additional reporting by Reuters
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