Key Points
- European regulators approved Broadcom's $61 billion acquisition of VMWare.
- Broadcom shares hit a record high on Wednesday after the announcement.
- UNITED STATES. and UK regulators have yet to agree to allow the deal.
Broadcom (AVGO) shares hit an all-time high, and VMWare (VMW) shares also rose after European regulators gave their tentative approval to purchase of software maker by Broadcom for $61 billion.
After a “thorough investigation”, the European Commission (EC) decided that the agreement would not substantially limit competition, although Broadcom will have to make certain concessions regarding Fiber Channel host bus adapters, or HBA FC, which will protect Marvell Technology (MRVL) and other potential rivals.
Margrethe Vestager, the EC Executive Vice President in charge of competition policy, explained that the commitments offered by Broadcom will allow Marvell “to continue to compete on a level playing field and on a level playing field”. ;provide similar protection to any future entrant”.
Broadcom said officials recognized that the VMWare acquisition would allow customers to “accelerate growth and momentum in the multi-cloud ecosystem”, expand the choice and create more potential for increased innovation and competition.
The company added this with CE, the merger has received legal clearance in Australia, Brazil, Canada, South Africa and Taiwan, and foreign investment control clearance in all necessary jurisdictions.
However, it does not has yet to gain approval from the US Federal Trade Commission (FTC) or UK regulators./>
YCharts
Do you have any news tip for Investopedia reporters? Please email us at tips@investopedia.com
Source: investopedia.com
