LONDON (Reuters) – Britain’s competition authority on Wednesday granted a provisional green light to Broadcom’s proposed $69 billion (61.54 billion euros) takeover of VMware, saying the deal would not harm competition in essential computer servers.
The clearance from the Competition and Markets Authority (CMA) follows one granted last week by European Union regulators as Broadcom offered interoperability solutions to some of its competitors to address their concerns.
“After reviewing evidence collected from Broadcom, VMware and other stakeholders, a panel independent of the CMA has concluded, on an interim basis, that the transaction would not materially lessen competition in the supply of server components in the UK,” the CMA wrote.
The proposed acquisition, the largest ever made by Broadcom, reflects the desire of the American chipmaker to diversify into enterprise software. It comes, however, at a time when regulators around the world are stepping up their oversight of merger deals at big tech companies.
The British regulator, which had expressed its concerns in March about a risk of higher prices for servers, said it now wanted to consult on this provisional approval before the final publication of its opinion by September 12.
Broadcom welcomed the green light and said it expects to close the deal in the current fiscal year.
On the stock market, around 2:10 p.m. GMT, VMware shares jumped 5.96% after hitting a record high at 170 dollars in early trading.
The Broadcom title for its part fell 1.73% to 887.72 dollars, while the Nasdaq Composite index advanced at the same time by 0.32%.
(Report Muvija M and Paul Sandle; French version Claude Chendjou, edited by Kate Entringer)
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