worth around $80 billion, was cleared by historically tech-hard European regulators in the latest sign that tech deals slowed by competition concerns could resume.
The European Commission said on Wednesday it had approved the chipmaker’s acquisition of the cloud computing group
(ticker: VMW), subject to compliance with the commitments proposed by
A victory for Broadcom in Europe is a good sign for the whole technology sector.
The industry has seen transactions slow, and it’s not just because of a higher interest rate environment. There has been a perception that regulators are unwilling to go through mega tech mergers and acquisitions, perhaps no more so than in Europe, which is home to some of the toughest competition watchdogs in the world. technology industry.
(NVDA) to buy chip designer Arm from SoftBank (SFTBY) was canceled by regulators last year, and Broadcom’s cash and stock deal to buy VMware – worth around $77 to $81 billion at current prices – could have suffered the same fate. With the deal cleared in Europe, attention is now turning to the United States, where the Lina Khan-led Federal Trade Commission is also reviewing the deal.
However, the FTC on Tuesday suffered a major blow to its campaign against corporate mergers, as a federal judge ruled against the agency’s halt to the $75 billion acquisition of
The high-profile defeat could make the regulator less likely to pursue anything other than a slam dunk, and Europe’s green light for Broadcom suggests the deal may not fall into that category. Tech dealmakers waiting on the sidelines — corporate deals have plunged this year — may now be bracing for a comeback.
“It was a black eye for Khan and the FTC and we expect the floodgates to now open on tech mergers and acquisitions,” said Dan Ives, analyst at brokerage Wedbush. “Broadcom and
are music to the ears of the tech world.
VMware shares jumped 5.2% on Tuesday following news from Activision, and rose another 1.6% in premarket trading on Wednesday after approval from Brussels. Broadcom stock rose 0.4%, building on a 0.5% gain on Tuesday.
This may just be the start of a wave of stock market moves driven by tech deal activity – finally.
Write to Jack Denton at firstname.lastname@example.org