Broadcom's acquisition of VMware gets conditional EU approval
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The European Commission (EC) granted conditional approval to Broadcom's (NASDAQ:AVGO) proposed $61B acquisition of VMware (NYSE:VMW), subject to compliance with commitments offered by Broadcom.
The EC's preliminary market investigation found that, by acquiring VMware, Broadcom could have restricted competition in the markets for the supply of Network Interface Cards (NICs), Fibre Channel Host-Bus Adapters (FC HBAs) and storage adapters.
EC said Broadcom has offered several comprehensive access and interoperability commitments to Marvell Technology (MRVL) and to any potential future entrant.
Broadcom has guaranteed access to the interoperability Application Programming Interfaces and to the materials, tools and technical support needed for developing and certification of third-party FC HBAs.
The company also committed to ensuring â their interoperability with VMware's server virtualisation software; and, third parties' access to this information at the same time as Broadcom.
EC added that Broadcom has also guaranteed access to the source code for all of its current and future FC HBA drivers via an irrevocable open source license.
This would allow Marvell and any potential entrant to ensure interoperability with VMware's server virtualisation software and allow them to reuse and modify Broadcom's drivers for its own use, according to the EC.
Broadcom also committed to implement an organisational separation between the team working on its FC HBAs and the team in charge of third-party certification and technical support.
The EC concluded that the proposed acquisition, as modified by the commitments, would no longer raise competition concerns and would maintain competition on the market for FC HBAs.
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