“The Merged Entity would be able to leverage 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,” the CMA argued Apr. Now, the British CMA has given Broadcom until May 9 to file a written response to its nine-page “ Issues Statement” that mapped out why it is concerned about the $61 billion buyout of VMware.

Federal Trade Commission that it was taking a more profound “second request” look at the merger of Broadcom and VMware. The Commission’s decision follows the announcement in July by the U.S. This would lead to higher prices, lower quality, and less innovation for customers and consumers.” “We are concerned that after the merger, Broadcom could prevent its hardware rivals from interoperating with VMware’s server virtualization software. “Our initial investigation has shown that it is essential for hardware components in servers to interoperate with VMware’s software,” said Margrethe Vestager, European Commission executive vice president in charge of competition policy, in a statement. It announced an “in-depth” investigation of the merger between the two companies, adding that it is also concerned that Broadcom could turn off its competitors’ access to VMware. Last December, The European Commission competition authority sounded the alarm. Michael Dell and Silver Lake, which own 40.2% and 10% of VMware shares outstanding, signed support agreements to vote in favor of the transaction.

In May 2022, Broadcom and VMware announced an agreement under which Broadcom would acquire all of the outstanding shares of VMware in a cash-and-stock transaction that values VMware at approximately $61 billion. Regulators now target the Broadcom-VMware deal Some examples are last year’s failed acquisition of Arm Technologies by Nvidia and the 2016 failed purchase of NXP Semiconductors by Qualcomm. This was the last of a list of mega deals scrapped by competition authorities.Įuropean authorities are the most critical of those deals as they consider them a threat to the common market, giving some companies excessive power in their respective industries.

The United Kingdom Competition and Markets Authority (CMA) recently blocked Microsoft’s $75bn acquisition of Activision. The announced purchase of VMware by Broadcom is now under the regulators’ magnifying glass.

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