The chipmaker was obliged to provide commitments and remedies to get the deal through
US chipmaker Broadcom has been given approval by the European Union to proceed with its $61 billion acquisition of VMware after offering remedies to bolster rival Marvell Technology.
The acquisition will enable Broadcom to diversify into enterprise software and is the company’s largest deal so far. The approval followed an in-depth investigation into one of the largest ever tech deals. The EU was concerned that the deal could disadvantage some of VMware’s clients.
Remedies and commitments
To get the deal approved, Broadcom offered remedies, including to ensure that VMware’s software can still work with rivals’ hardware. Specifically, Broadcom gave Marvell and other rivals interoperability commitments related to its Fibre Channel Host-Bus Adapters (FC HBAs), which are storage adapters, according to the European Commission, as reported by Reuters last month.
Marvell and other rivals will have “guaranteed access to the interoperability Application Programming Interfaces as well as to the materials, tools and technical support necessary for the development and certification of third-party FC HBAs”, the EU’s head of competition said.
Competitors are guaranteed access to the source code for all of Broadcom’s current and future FC HBA drivers through an irrevocable open source licence, as part of the approval’s terms.
Happy Commissioner
“The commitments offered by Broadcom will enable its only rival Marvell, to continue competing on equal footing and ensure a similar protection for any future entrants,” Margrethe Vestager, the EU’s Commissioner for Competition and Digital said.
The US’ Federal Trade Commission and the UK’ Competition and Markets Authority are still scrutinising the deal.
Broadcom said in a statement, “We continue to make progress with our various regulatory filings around the world, having received legal merger clearance in Australia, Brazil, Canada, the European Union, South Africa, and Taiwan, and foreign investment control clearance in all necessary jurisdictions”