Antitrust officials in the European Union are set to approve Broadcom Inc.’s proposed acquisition of VMware Inc., according to a new report.

Reuters today cited sources as saying that the approval is expected to be conditional. Broadcom will reportedly only receive the go-ahead if it agrees to make certain antitrust commitments.

Broadcom announced its proposed $61 billion acquisition of VMware, one of the tech industry’s largest-ever takeover offers, last May. The company projected at the time that the deal would increase its annual revenue to about $40 billion. Nearly half of that revenue is expected to be generated by software products, most notably those VMware would add to Broadcom’s portfolio. 

The company also estimates that the deal could boost its profitability. Broadcom hopes to nearly double VMware’s annual profits to $8.5 billion within three years of closing the transaction.

Antitrust regulators in the U.S., the U.K. and the EU began reviewing the acquisition soon after it was announced. The European Commission, the EU’s executive branch, in April reached the preliminary conclusion that the deal could harm competition. Today’s report suggests that officials in the bloc will only approve the deal if certain antitrust concerns are addressed by Broadcom.

One of the concerns in question reportedly relates to FC HBAs, or Fibre Channel host bus adapters. Those are chips used in data centers to connect servers with storage equipment. Broadcom is a major provider of such chips.

VMware, in turn, is a major provider of software for managing data center infrastructure. Its flagship vSphere hypervisor runs on a sizable portion of the world’s on-premises servers. The company also sells tools for managing storage equipment and network devices.

Because VMware software is widely used in on-premises data centers, FC HBA suppliers must ensure their chips support the company’s products. The EU is concerned that Broadcom, itself a major FC HBA supplier, may limit rival chipmakers’ access to VMware’s software.

Today’s report didn’t detail exactly what antitrust commitments Broadcom will have to make to receive regulatory approval. However, it did specify one commitment concerns Marvell Technology Inc., a rival FC HBA supplier. Regulators might require assurances from Broadcom that Marvell will continue to have access to VMware technology following the deal.

The FC HBA market is only one area where EU regulators have identified antitrust risks. In April, officials also raised concerns about the deal’s impact on the NIC, or network interface card, segment. NICs are chips used to connect servers to the network of the data center in which they’re deployed.

Broadcom is a major supplier of such chips. It competes in the NIC segment with Marvell, as well as Nvidia Corp. and a number of other market players.

The potential impact of the VMware deal on the NIC segment is also a focus for the U.K.’s antitrust regulator. The Competition and Markets Authority, or CMA, earlier this year found that the acquisition may harm competition in that area. The regulator is currently conducting an antitrust investigation into the deal. 

Image: Broadcom