The gap between VMware Inc.’s stock price and the value of Broadcom Inc.’s proposed takeover narrowed to the smallest in two months, signaling diminished worries that the $61 billion merger will be derailed by regulators.

VMware shares rose as much as 2.4% to $155.18 Wednesday, extending the previous day’s rally, after the European Commission approved the semiconductor tie-up. The move pushed the company’s stock price to around $28 below the approximately $183.50 investors will receive in the cash-and-stock deal, according to an estimate based on current market values.

Read: Broadcom Gets EU Green Light for $61 Billion VMware Deal (1)

The deal still needs approval from regulators in the US and UK. But the narrowed gap between VMware’s trading price and what shareholders will receive if the deal closes shows investors are growing more positive after a US judge rejected the Federal Trade Commission’s effort to block the merger between Activision Blizzard Inc. and Microsoft Corp. The UK’s regulator, which had initially vetoed that deal, has said it is willing to reconsider.

The Activision ruling “reverberated across the merger arbitrage universe, especially transactions currently in an FTC second request,” said Frederic Boucher, a risk arbitrage analyst at Susquehanna International Group. He noted VMware-Broadcom has been in such in-depth review since last year.

“The spread tightened materially, no doubt helped with the EC clearance but probably a little bit as well with the ATVI ruling,” he said.