Broadcom, VMware shares rise after EU Commission signs off on $61 billion merger

Investing.com -- Broadcom Inc. (NASDAQ:AVGO) has secured approval from the European Commission for its proposed $61 billion merger with cloud computing group VMware (NYSE:VMW), leaving the U.S. and Britain as some of the only countries yet to give regulatory approval to the transaction.

The EU antitrust watchdog first flagged that the U.S. chipmaker's acquisition of VMware would harm competition in the global market for the supply of Fibre Channel Host-Bus Adapters, or FC HBAs, which are a type of storage adapter.

But the EU Commission said Broadcom had offered remedies to assuage this concern. In particular, the California-based company pledged to grant comprehensive access and interoperability commitments to Marvell Technology Group (NASDAQ:MRVL), its closest rival, and any future competitor.

This promise includes access to "the materials, tools and technical support necessary for the development and certification of third-party FC HBAs," the EU's competition enforcer noted. Peers will also be able to access the source code for all of Broadcom's current and future FC HBA drivers via an irrevocable open source license.

EU antitrust chief Margrethe Vestager said in a statement to Reuters that the commitments offered by Broadcom will enable Marvell to continue competing "on equal footing and ensure a similar protection" for any new entrants.

Regulators in the U.K. and U.S. now make up two of the last holdouts to the deal's close, which would be one of the largest tech tie-ups in history and transform the chipmaker into a diversified tech firm offering cloud computing services. Similar authorities in Brazil, South Africa, and Canada have already signed off on the deal.

Shares in both Broadcom and VMware rose in early U.S. trading on Wednesday.