VMware/Broadcom deal spread narrows amid report of imminent EU approval
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The deal spread in Broadcom's (NASDAQ:AVGO) planned $61 billion purchase of VMware (NYSE:VMW) narrowed amid a report that the European antitrust regulator is set to approve the acquisition of the cloud-computing company. The spread narrowed to $29.83 from $37.78 on Monday.
The European Commission is expected to approve the deal as soon as Wednesday after months of negotiations, according to a Bloomberg report on Tuesday, which cited people familiar with the situation. The approval is conditioned on Broadcom's (AVGO) interoperability remedies for rivals that address the EC's antitrust concerns.
The latest news comes after Reuters reported last month that the EC was expected to give approval for the VMware (VMW) deal. The approval comes ahead of the July 17 deadline for the European regulator to make a decision on the transaction. Broadcom (AVGO) submitted remedies to the European Commission on May 16.
The Bloomberg report comes as the deal is also being probed by the U.S. Federal Trade Commission as well as the UK's antitrust regulator. In late March, the UK's Competition and Markets Authority moved its review of VMware/Broadcom into Phase 2, or an in-depth investigation.
Dealreporter last month said that Broadcom (AVGO) is waiting to hear back from the European antitrust regulators on VMWare before responding to the FTC's second request.
VMware, which gained 5% on Tuesday, may also be seeing a boost after a U.S. federal judge in San Francisco denied a preliminary injunction to block Microsoft's (MSFT) planned $69 billion acquisition of Activision (ATVI). The decision is viewed as a big loss for the FTC, and investors may see read-through in any potential efforts by the agency to try to block the VMware/Avago deal.
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