Broadcom’s
planned takeover of
VMware
has been cleared by British regulators, leaving approvals in the U.S. and China as the last major obstacles 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.
The last major Western regulator still to give its approval is the U.S.’s Federal Trade Commission. However, a bigger doubt could be a clearance from China. 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, including that of the FTC, 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 in a statement.
Broadcom shares were up 0.2% in premarket trading while VMware shares were up 6.6%.
Write to Adam Clark at [email protected]
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