Broadcom gained a significant regulatory victory in its long-simmering quest to acquire VMware, though the chip giant still has hurdles to clear if it’s going to close on the deal before a self-reported Oct. 31 deadline.

The European Commission (EC) signed off on the deal, noting it had gained concessions from Broadcom following an “in-depth investigation.” That investigation centered around concerns the deal “would harm competition in the worldwide market for the supply of [fiber channel host-bus adapters],” with a particular focus on Broadcom being able “to foreclose Marvell, the only rival on the market for the supply of FC HBAs, by restricting or degrading the interoperability between VMware's server virtualization software and Marvell's hardware.”

“This would hamper Marvell's ability to compete in a market where Broadcom is dominant, or at least holds a very strong position, ultimately leading to higher prices, lower quality and less innovation for business customers,” the EC expressed.

In response, Broadcom offered to guarantee access to its APIs and technical support for the development and certification of third-party FC HBAs, including access via an open-source license to the source code for all of Broadcom’s current and future FC HBA drivers; interoperability with VMware server virtualization software; and providing third parties access to this information at the same time that Broadcom gains access.

Broadcom will also provide organizational separation between its FC HBA team and the team in charge of third-party certification and support. This will help support ensuring protection of confidential information from third-party vendors like Marvell.

“While Broadcom believes that its proposed acquisition of VMware will only increase competition and innovation in cloud computing, Broadcom provided the European Commission with a technology access remedy that preserves interoperability, a core principle that would not have changed as a result of this transaction,” Broadcom noted in a statement. “Broadcom did this to fully address the concerns expressed by the European Commission, and Broadcom welcomes the commission's decision to accept this access remedy.”

Broadcom also noted it has “received legal merger clearance in Australia, Brazil, Canada, South Africa and Taiwan, and foreign investment control clearance in all necessary jurisdictions,” and that it continues to expect the deal to close by the end of its current fiscal year.

However, Broadcom is still staring at two significant regulatory hurdles: the United Kingdom and the United States.

The United Kingdom’s Competition and Markets Authority (CMA) regulator initiated an advanced review phase on the deal in March. That move came after Broadcom informed the CMA that it would not be providing any “undertakings” following the completion of the initial review process.

The CMA has expressed similar competitive concerns highlighted by the EU investigation. This includes a “substantial lessening of competition” by leveraging “VMware’s market power in server virtualization software to reduce the competitiveness of Broadcom’s hardware rivals by, for example, impairing the certification of competitors’ drivers for Ethernet NICs, FC HBAs, and storage adapters, and impairing access to VMware’s API for competitors’ FC switches.”

Broadcom refuted those concerns, explaining it has no financial incentive to degrade third-party support, and will in fact increase competition for enterprise workloads, which is increasingly being dominated by hyperscalers like Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform (GCP).

“Broadcom believes it can provide VMware with the scale and capabilities to reverse this trend,” it wrote in its response. “With time and investment, Broadcom’s objective is to enable enterprises more easily to deploy workloads across cloud environments (both private and public) and to move workloads among those environments.”

Analysts have in the past expressed concerns over Broadcom’s investment commitment to VMware.

“For acquired companies, a Broadcom acquisition sparks fear of price hikes, diminished support and stunted innovation,” Forrester Senior Analyst Tracy Woo bluntly stated in a report tied to the initial Broadcom purchase announcement. “At a time when VMware customers need to re-establish confidence in the company’s strategy and innovation plans after beloved ex-CEO Pat Gelsinger’s departure, this would be a notable departure from that course.”

Woo cited Broadcom’s past acquisition “playbook” as a cautious path forward should the deal be completed. She specifically noted Broadcom’s $18.9 billion purchase of CA Technologies in late 2018, and its subsequent acquisition of Symantec for $10.7 billion in 2019.

“Following these purchases, CA and Symantec customers saw massive price hikes, worsening support, and stalled development,” Woo wrote. “Symantec redirected its focus to its biggest resellers and customers. The company largely abandoned its customer base of 100,000 to prioritize its top 2,000.”

The CMA-instigated investigation does have a Sept. 12 deadline, which would still allow Broadcom to follow through on CEO and President Hock Tan’s past claims that the deal would close during Broadcom’s 2023 fiscal year, which ends Oct. 31. However, that would also require CMA approval as well as other pending government inquiries, including the Federal Trade Commission (FTC) in the United States.

The FTC has been mulling over the deal since it was announced. The government agency has been quiet on that investigation, though it has reportedly held several closed-door meetings to discuss the transaction.

The deal is valued at $61 billion in cash and stock, with Broadcom also assuming $8 billion in VMware debt, pushing the deal’s total value to $69 billion. VMware shareholders have already approved the deal, however Broadcom does have a $1.5 billion termination fee should the deal fall apart.