Trying to get mergers and acquisitions done these days seems to be a lot tougher than it’s been in the past. Nearly every attempted merger these days is met with deep scrutiny from almost every government on the planet. The latest move between Broadcom (NASDAQ:AVGO) and VMWare (NASDAQ:VMW) just cleared its latest hurdle. Despite that, Broadcom still lost just a little in Wednesday afternoon’s trading.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
The deal, valued at around $80 billion, just managed to get clear of the U.K. Competition and Markets Authority’s grasp. The agency found that Broadcom stepping in to take over VMWare wouldn’t actually reduce competition for server hardware. It reached that finding on a provisional basis, however, so there may be some future backlash. Now, the deal faces just one major hurdle left: the Federal Trade Commission in the United States.
And that may actually be good news for Broadcom’s ambition to take over VMWare. The FTC recently managed to run afoul of a federal court by way of the Microsoft (NASDAQ:MSFT) and Activision-Blizzard (NASDAQ:ATVI) merger. The FTC looked to block the deal, but the plan was itself blocked by U.S. District Judge Jacqueline Scott Corley. That move may put the FTC on the back foot, as it must, based on precedent, prove the loss of competition in a market. With the Brits saying it passes muster, that will make the FTC’s task even tougher.
Analysts are pretty happy with Broadcom stock regardless, calling it a Strong Buy as supported by 13 Buy ratings and two Hold. Meanwhile, with an average price target of $880.79, even today’s price movement isn’t enough to remove a slight downside risk of 2.37%.
