VMware (NYSE:VMW) shares gained over 7% in pre-open trading Wednesday after the U.K.'s CMA provisionally cleared the anticipated acquisition of the company by Broadcom (NASDAQ:AVGO).
“The Competition and Markets Authority (CMA) has provisionally found that the anticipated acquisition (the Merger) of VMware, Inc. (VMware) by Broadcom Inc. (Broadcom) may not be expected to result in a substantial lessening of competition (SLC) in relation to the supply of various server hardware components in the United Kingdom (UK),” the regulatory body said in a statement today. It is not the final decision, however. A final report is due by September 12, 2023.
Earlier in the month, the deal received conditional approval from the European Commission.
Broadcom has also received legal merger clearance in Australia, Brazil, Canada, South Africa, and Taiwan, and foreign investment control clearance in all necessary jurisdictions.
In May 2022, VMware agreed to be acquired by Broadcom for 0.2520 shares of Broadcom common stock for each VMware share. The deal values VMware at approximately $69 billion.