The British competition watchdog has given its provisional approval to the $69 billion merger deal between chip manufacturer Broadcom and cloud computing giant VMware.
"An independent CMA panel has provisionally found the deal would not substantially reduce competition in the supply of server hardware components in the U.K.," the British Competition and Markets Authority (CMA) said on Wednesday.
Explaining its decision, the CMA said that it has determined the agreement likely won’t negatively affect innovation in the U.K.
However, the market regulator pointed out that it will hold consultations with involved parties until August 9 before releasing its final report by September 12.
Broadcom originally announced it would acquire VMware in May last year, noting the deal would advance Broadcom's strategy to build the world's leading infrastructure technology company.
The agreement confirmed that Broadcom would purchase VMware for $61 billion and assume $8 billion of the company’s debt. Broadcom Software Group, meanwhile, agreed to rebrand and operate as VMware after the merger is finalized.
However, the CMA launched an investigation into the deal in January to determine whether the merger could hurt competition within the U.K. market.
Meanwhile, the European Union okayed the deal last week, noting that Broadcom must ensure its competitors keep access to application programming interfaces (APIs) and other necessary tools for developing and certifying third-party fiber channel host bus adapters (FC HBAs) over the next decade.
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