Why VMware Stock Is Rising Wednesday

VMware Inc VMW shares are trading higher Wednesday after the UK's Competition and Markets Authority (CMA) provisionally cleared Broadcom Inc AVGO to buy the company.

What To Know: According to a Bloomberg report, Broadcom's proposed takeover of VMware has been provisionally approved after the CMA initially decided that the deal wouldn't materially impact computer product supply competition.

The agency was reviewing Broadcom's planned acquisition, which was proposed as a cash-and-stock transaction valued at $61 billion last year, to determine if it would hurt competitors' ability to work with VMware software. 

"Computer servers – often using the products of Broadcom and VMware – play a critical role in enabling us to work in the office or at home or to access TV shows or use banking services. We have provisionally found that this deal would not harm competition," said Richard Feasey, chair of the independent investigation panel.

Last year, Broadcom said if the deal is completed, the Broadcom Software Group will rebrand as VMware and incorporate Broadcom's existing infrastructure and security software solutions as part of an expanded VMware portfolio.

The combined company will provide enterprise customers an expanded platform that can help accelerate innovation and address information technology infrastructure needs.

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VMW Price Action: VMware shares were up 7.75% at $170.75 at the time of publication, according to Benzinga Pro.

Photo: Chris Hsia from Flickr.