Broadcom has made substantial progress in securing its $61 billion acquisition of VMware, following approval from the European Commission after an extensive investigation into potential competition issues.
Officials concluded that Broadcom’s power in the network and storage adapter sector is limited and would not significantly harm competition.
However, concerns were raised regarding the potential impact on Marvell, Broadcom’s long-standing rival, through restrictions on the compatibility of Marvell’s Fiber Channel adapters with VMware.
To address these concerns, the EU regulator has imposed requirements on Broadcom.
The company must provide third parties with the necessary tools to create compatible Fiber Channel adapters.
Additionally, Broadcom is obligated to provide the source code for the drivers that operate these adapters, ensuring that companies can ensure seamless functionality with VMware’s server virtualization technology.
Broadcom remains optimistic about the progress of the merger and highlights similar arrangements in countries such as Australia, Canada, and South Africa.
However, the company still awaits reviews from the US Federal Trade Commission and the UK’s Competition and Markets Authority.
If the deal is successfully concluded, it will be one of the largest tech acquisitions to date.
Only Dell’s purchase of EMC ($67 billion) and Microsoft’s potential buyout of Activision Blizzard ($68.7 billion) surpass it in size.
This acquisition would mark a significant expansion for Broadcom, enabling it to venture into enterprise software and exert greater control in the business world.
It would also serve as a partial redemption from Broadcom’s failed attempt to acquire Qualcomm in 2018.