South Korean Regulator Conditionally Approves Broadcom’s $61 Billion Acquisition of VMware

SEOUL - South Korea's antitrust authority announced on Monday that it has granted conditional approval for U.S. chipmaker Broadcom Inc.'s acquisition of software company VMware Inc., citing concerns over potential anti-competitive practices.

According to a new release by Yonhap News Agency, the decision comes after a thorough review of the merger, focusing on VMware's role as a "de facto standard" in the server virtualization ecosystem and its influence on certifying related market components. The FTC expressed concern that VMware could use its position to delay or refuse interoperability certifications for components produced by Broadcom's competitors or new market entrants.

The FTC also noted Broadcom's significant market share in Fibre Channel Host-Bus Adapters (FC HBA), making up 64.5 percent of the market. These adapters are directly linked to server virtualization software.

To mitigate the risks of anti-competitive behavior, the FTC has laid out specific conditions for the approval. Broadcom is required to guarantee interoperability for competitors and new businesses for the next decade. The company must also provide source codes for the FC HBA when a third party requests them for interoperability reasons.

The antitrust regulator has given Broadcom 60 days to present detailed measures that will ensure compliance with these conditions.

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