The UK competition watchdog has cleared the £6bn takeover of Avast PLC (LSE:AVST) by US giant NortonLifeLock following an in-depth probe, paving the way for the removal of another tech sector name from the FTSE 100.
The Competition and Markets Authority (CMA) originally launched a 'phase 2' investigation in March, as both companies offer cyber safety software to consumers, including antivirus software, VPNs and identity protection software, and an initial investigation suggested "realistic prospects of a substantial lessening of competition".
The CMA investigation and a subsequent consultation have now cleared the deal.
"The CMA's Phase 2 investigation has found that the supply of cyber safety software to consumers is rapidly evolving. Providers of paid-for and free services are continually developing and improving their products to meet different and changing customer needs," it said.
The merging businesses face significant competition from McAfee and a range of suppliers with smaller market positions, the regulator added, while in-built security applications provided by Microsoft as part of its Windows operating system were also found to have improved "so that it now offers protection which is as good as many of the products offered by specialist suppliers".
The decision was not a surprise, said analyst at AJ Bell, noting that it "adds to a potential exodus of firms from an already threadbare UK tech sector".
Fellow Footsie constituents Aveva and Micro Focus are also in discussions about being taken over.
Completion of the Avast deal will results in a chain reaction of alterations to the FTSE 100 index.
Once Avast leaves, it will be replaced by HomeServe - but only temporarily, as the home repairs company is also soon to be taken over too.