EU investigates Broadcom’s $61 billion acquisition of VMware

Written by John Hewitt Jones
December 20, 2022 | FEDSCOOP

The European Commission has opened an in-depth antitrust investigation into the proposed $61 billion acquisition of cloud computing and virtualization company VMware by chipmaker Broadcom.

In a statementthe commission said it was concerned that the transaction could allow the chipmaker to limit competition for certain hardware components that interact with VMwares software.

In particular, the European Commission (EC) will investigate whether the deal could result in Broadcom restricting the market for the supply of network interface cards (NICs), Fiber Channel Host-Bus Adapters and storage adapters.

It will also explore whether the transaction could affect the development of smart NICs and whether Broadcom could start bundling its own software with VMware’s virtualization software after the deal.

The full antitrust investigation comes after the United Kingdom’s competition regulator opened an initial investigation into the transaction in late November.

Meanwhile, the Federal Trade Commission (FTC) in the United States has done just that gone forward with a stricter second request to review the deal.

If they make progress, the regulatory probes could prevent Broadcom from completing its acquisition of the cloud computing company.

However, Broadcom has argued that VMware’s multi-cloud management tools combined with Broadcom’s semiconductor and infrastructure software products could increase choice and innovation within the cloud computing market.

The European Commission was notified of the transaction on November 15 and now has 90 working days until May 11 next year to make a decision.

There was news of the EU’s decision to launch an in-depth antitrust investigation reported first by Reuters.