The European Commission raises no objections to the proposed acquisition of Broadcom by Avago. The acquisition, announced in May, involves an amount of 37 billion dollars, which is approximately 35 billion euros.
In a press release, the European Commission announces that the planned takeover can go ahead. The authorities point out that both Broadcom and Avago are in the semiconductor market, but there would still be sufficient competition after the acquisition. According to the European Commission, the products offered by both companies are complementary, as Broadcom mainly deals with ready-made products, while Avago specializes in customized products.
One of the potential stumbling blocks was the fact that Avago has licenses with Broadcom’s competitors; these unspecified companies use Avago intellectual property. The European Commission was concerned that after the acquisition of Broadcom, Avago could refuse to license its competitors any longer. The company addressed this problem by drafting agreements that ensure that Broadcom’s competitors can obtain the licenses at a “reasonable” price in the future.
In May, Avago and Broadcom announced that they had reached an agreement on the acquisition. The amount of converted 35 billion euros that is involved makes it one of the largest acquisitions in the technology sector. The acquisition creates a market leader in communication chips, both wired and wireless, with total annual sales of $15 billion.