US chipmaker Broadcom has secured EU approval for its proposed $61bn acquisition of cloud computing company VMware. The deal, Broadcom‘s largest in history, was approved by the EU on condition that it fulfil certain compliance commitments it had made.
These commitments by Broadcom were proposed to ensure the merger between the two companies would not create a conglomerate effect in the server market, the EU Commission said in a statement on Wednesday 12th July, 2023.
The US semiconductor company offered rivals Marvell Technology and others, interoperability commitments including guaranteed access to the materials, tools and technical support necessary for the development and certification of third-party fibre channel host bus adapters (HBA).
The deal is also subject to Broadcom allowing Marvel and its other competitors access to source code for all of the company’s current and future fibre channel HBA drivers through an irrevocable open-source license.
Broadcom appears to be aiming to gain a stronger foothold in the cloud computing market. VMware’s hybrid cloud model enables large enterprises to merge public cloud access with company networks.
“Broadcom holds a very strong position in the market for the supply of certain hardware components,” said Margrethe Vestager, EU antitrust executive vice-president.
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“VMware is a key server virtualisation software provider. By acquiring VMware, Broadcom could restrict or degrade interoperability between VMware’s leading server virtualization software and some competing hardware components,”
Vestager added that the commitments offered by Broadcom would allow its major rival Marvell “to continue competing on equal footing and ensure a similar protection for any future entrants.”