Broadcom and VMware’s merger has been provisionally approved by the UK’s competition watchdog.
The Competition and Markets Authority (CMA) gave the green light to a £53bn merger between US chipmaker Broadcom and cloud-based firm VMware, the joint-largest takeover it has investigated.
The mega deal, first announced in May last year, consists of a £47bn purchase price and the assumption of £6bn of debt, matching the same value of the takeover of Activision Blizzard by Microsoft.
Concerns were raised by the CMA that the move could hike the cost of computer servers used by the UK Government, banks and telecoms firms.
Broadcom creates hardware used by public and private companies in the UK, while VMware produces software used by firms.
However, the CMA concluded that it provisionally found the deal would not substantially reduce competition in the supply of computer server hardware parts.
The watchdog also suggested that the financial benefits could outweigh the costs of business being lost as a result and that the deal is “unlikely” to harm innovation.
Microsoft’s takeover of Call of Duty maker Activision Blizzard was blocked by the UK watchdog earlier this year with fears it would stifle competition.
Last week, however, the CMA said it would consider Microsoft’s argument that new developments should mean its acquisition goes ahead.