South Korea Joins Europe In Attaching Conditions To Broadcom VMware Approval: Reports
While there is still no word on whether Chinese commercial authorities will approve the deal, South Korea has. Regulators with the Korean Fair Trade Commission have forced Broadcom to agree to 10 years worth of conditions similar to those imposed by the European Commission.
With one week to go before its self-imposed deadline, Broadcom has won approval for its acquisition of VMware in South Korea.
The Korean Fair Trade Commission granted Broadcom its conditional approval to merge with VMware, as long as the chip giant plays fairly with competitors in the market for another 10 years, according to published reports.
Approval of the acquisition was reported by the Korean Economic Daily, which said the nation’s regulators have approved the $61 billion acquisition that would pair the San Jose, Calif.-based chip giant with the Palo Alto, Calif.-headquartered virtualization all star.
To prevent the newly combined companies from taking advantage of its position of delay or obstruct interoperability certifications, the agency ordered Broadcom to guarantee interoperability for competitors and new businesses for a period of 10 years.
Additionally, Korean antitrust regulators asked Broadcom to provide source code for its Fibre Channel Host Bus Adapters when requested by an independent third party, to maintain interoperability.
CRN has reached out to Broadcom about winning approval in South Korea and the still-pending process in China but did not hear back by press time.
According to published reports, Beijing is threatening to block the merger, even after the deal has cleared regulators around the world. The move is in apparent retaliation for U.S. trade restrictions on advanced chips from Nvidia and Micron, three people told the Financial Times.
The U.S. this week announced tougher measures to limit China’s access to high-end chipsets that could fuel breakthroughs in AI and sophisticated technology for its military. The U.S. restrictions hit China, Russia and Iran and blacklisted a Chinese chip designer.
Korea gave Broadcom 60 days to come back to the agency with a framework that would let it meet regulatory conditions.
However, the European Commission has already covered some of the ground in its negotiations with Broadcom to win acquisition approval.
After a monthslong investigation, the European Commission found that Broadcom could “foreclose” its only rival for Fibre Channel Host-Bus Adapters (FC HBAs), chipmaker Marvell, had the deal been allowed to proceed without conditions.
“The commitments offered by Broadcom will enable its only rival, Marvell, to continue competing on equal footing and ensure a similar protection for any future entrants,” Margrethe Vestager, executive vice president in charge of competition policy for the European Commission, wrote in announcing the decision.
Broadcom agreed to give competitors access to the source code for all of its current and future FC HBA drivers.
In addition, it will give rivals access to interoperability APIs necessary for the competition to develop and certify third-party FC HBAs. It has promised to keep that working for rivals and to give them the same real-time access to information for 10 years.
The agreement also will be monitored by an independent trustee and come with a fast-track dispute resolution process.
“This will allow Marvell and any potential entrant to ensure interoperability with VMware’s server virtualization software and allow them to reuse and modify Broadcom’s drivers for its own use,” the commission wrote. “Furthermore, Broadcom committed to implementing an organizational separation between the team working on Broadcom’s FC HBAs and the team in charge of third-party certification and technical support. It also committed to ensuring protection of confidential information of Marvell and any potential entrant obtained in the context of the interoperability and certification processes.”