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Broadcom’s acquisition of VMware will diversify its business into cloud computing.
Justin Sullivan/Getty Images
Broadcom’s planned takeover of VMware has been cleared by British regulators, leaving approval in China as the last major obstacle to the deal, originally valued at $61 billion.
The U.K.’s Competition and Markets Authority said Monday that chip maker
Broadcom
’s
(ticker: AVGO) purchase of cloud-computing company
VMware
(VMW) wouldn’t substantially reduce competition in the supply of server hardware components. It follows a similar decision from the European Union.
While the Federal Trade Commission hasn’t publicly commented on the deal, Broadcom said in a statement that the mandated premerger waiting periods had expired and that there was no legal impediment to closing under U.S. regulations.
A clearance from China is still pending. Chinese regulators have already scuttled one chipmaker’s deal this month by failing to approve
Intel
’s
(NTC) planned $5.4 billion acquisition of
Tower Semiconductor
(TSEM) before a key deadline.
A merger triggers an antitrust review in China if two companies in a deal have annual revenue of more than $117 million from the country. Broadcom generates billions in revenue from China.
While the failure of the Intel deal has raised alarms about China using its antitrust review process to flex its muscle, there is no reason to assume it will necessarily do the same in the Broadcom case. The deal is an expansion outside of the semiconductor industry and China has approved big mergers involving U.S. companies, such as
Microsoft
’s
(MSFT) acquisition of
Activision
(ATVI), in recent months.
Broadcom said on Monday that it expects to receive the final regulatory approvals before Oct. 30.
“Broadcom continues to work constructively with regulators in other jurisdictions and is in the advanced stages of the process toward obtaining the remaining required regulatory approvals,” the company said.
Broadcom shares were up 2% in early trading while VMware stock was up 4.3%.
Corrections & Amplifications: The mandatory premerger waiting periods for Broadcom’s acquisition of VMware have expired and there is no U.S. regulatory impediment to closing the transaction, according to Broadcom. An earlier version of this article incorrectly said the merger was still awaiting approval from the Federal Trade Commission.
Write to Adam Clark at [email protected]
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