EU regulator greenlights Broadcom $61bn-buy out of VMware
2 Min Read
US chip giant Broadcom resolved concerns presented by the EU commission over competition fears before the deal was approved.
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Broadcom's logo can be seen on a billboard facing the company's headquarters. (AP)
US chip maker Broadcom's $61-billion takeover of cloud computing giant VMware has been approved by the European Commission on Wednesday, but the company must fulfill some conditions laid out by the regulator to address fears in the market.
Following Broadcom's offer to buy out VMware in May 2022, the company said it wants to offer clients "greater choice and flexibility to build, run, manage, connect and protect applications at scale."
However, major concerns over competition rose after the deal was first announced, which subjected Broadcom to antitrust investigations in the EU and UK.
The $61 billion acquisition offer "may be expected to result in a substantial lessening of competition" for domestic businesses, UK's Competition and Markets Authority (CMA) said in March after a probe launch. The acquisition might “lead to less innovation and drive up the cost of computer parts and software,” the completion authority added.
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The EU watchdog said after the announcement that its in-depth investigation over the initially revealed acquisition deal "would harm competition in the worldwide market for the supply" of Fibre Channel Host-Bus Adapters (FCHBAs).
To solve this issue, the chip manufacturer offered interoperability commitments to rival Marvell Technology and any other potential competition regarding the FCHBAs, the commission said.
But Broadcom also guaranteed open access to the source code for all its current and future FC HBA drivers through an irrevocable open-source license.
Commenting on the changes, the commission said that "the proposed acquisition, as modified by the commitments, would no longer raise competition concerns."
The semiconductor giant earlier acquired CA Technology and Symantec - tech firms that offer complimentary services - in an attempt to expand its software market reach.
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