logo
  

European Commission Approves Avago Techn's Acquisition Of Broadcom

The European Commission has approved proposed $37 billion acquisition of Broadcom Corp. (BRCM) by Avago Technologies Limited (AVGO). Both companies are global manufacturers of semiconductors. The Commission concluded that the merged entity would continue to face effective competition in Europe.

The Commission's investigation showed that the portfolios of the companies are mainly complementary since Broadcom makes "off-the-shelf" chips for the broadband and connectivity market segments, while Avago makes custom-built chips for special applications in the analog wireless integrated circuits, enterprise, storage and industrial segments.

Nevertheless, the Commission said it had some concerns about the vertical relationship created by the transaction, since Avago supplies certain intellectual property to some of Broadcom's competitors. The Commission's concern was that after the takeover Avago could have had an incentive to withhold this intellectual property in order to extend the merged entity's leading market position in the so-called "switch chips" market.

However, already during the Commission's assessment of the case, Avago addressed these concerns by entering into commercial agreements with other "switch chip" manufacturers. These agreements will ensure that other "switch chip" manufacturers will continue to have access to the necessary intellectual property on reasonable terms.

In May, Avago Technologies Limited and Broadcom Corp. announced they entered into a definitive agreement under which Avago would acquire Broadcom in a cash and stock transaction. Avago will acquire Broadcom for $17 billion in cash consideration and the economic equivalent of approximately 140 million Avago ordinary shares, valued at $20 billion.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
Novartis AG (NVS) Thursday announced that the FDA has granted Breakthrough Therapy designation to Scemblix for treating adult patients with newly diagnosed Philadelphia chromosome-positive chronic myeloid leukemia or CML in chronic phase. This is the third Breakthrough Therapy designation assigned to... The U.S. Consumer Product Safety Commission or CPSC has announced recalls including utility vehicles or UTVs and snowmobiles, as well as electric wall ovens, spin swivel chairs, toy pinwheels, and children's nightgowns citing various reasons. Augusta, Georgia-based Textron Specialized Vehicles is recalling Prowler Pro and Tracker UTVs citing fire risk, as well as Arctic Cat Model Year 2024... Texas Pecan Co. is recalling various nuts, snack mixes, seeds, and snack sticks in 1 Lb and 8 oz sizes, citing the potential to contain undeclared peanut, tree nuts, soy, milk, sesame, and wheat allergens, according to the U.S. Food and Drug Administration.

Jobless claims data was the highlight in this relatively light week for U.S. economics. In Europe, focus was on the U.K. economy where the Bank of England announced its latest policy decision and the first quarter GDP data were released. Find out the signals from the central bank and whether or not the UK economy exited a recession. In the Asia-Pacific, Australia's central bank delivered its latest policy verdict and China released trade figures.

View More Videos
Follow RTT