The UK also agrees to Broadcom’s multi-billion dollar takeover of VMware
- July 20, 2023
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Once approved by the CMA, only the US FTC remains to give its approval. The talks are to be held behind closed doors. More than a year after
Once approved by the CMA, only the US FTC remains to give its approval. The talks are to be held behind closed doors.
More than a year after the initial $61 billion bid, Broadcom’s acquisition of VMware is in full swing. Following earlier European approval last week, the UK’s Competition and Markets Authority (CMA) has also approved the acquisition. The last hurdle is the FTC, the US regulator.
After a two-stage review by the CMA, an independent four-person panel concluded that the deal will not impede innovation. The panel emphasizes that if Broadcom decides to restrict VMware’s functionality to competing hardware, the business loss will be greater than the gain gained.
The UK has focused its research heavily on innovation in server components and has now announced that the acquisition of VMware will not hurt competition.
The CMA’s decision is preliminary. Anyone who disagrees has until August 9th to express their opinion to the CMA, after which a final report will be submitted by September 12th at the latest.
EU OK, USA not yet
Europe rose last week after it too required a two-tiered investigation. Broadcom had to make some concessions to please the EU regulator. For example, the company is making its drivers for Fiber Channel host-bus adapters (FC HBAs) open source today and for future upgrades. Broadcom also confirms access and interoperability with other hardware manufacturers such as Marvell to ensure support.
Broadcom previously extended the deal’s deadline from May 26 to August 26 due to longstanding approval from regulators around the world. Another extension looks strong to us as Broadcom’s fiscal year ends Oct. 31. Broadcom CEO Hock Tan has often mentioned in interviews that he would like to close the deal before the end of the fiscal year.
The US Federal Trade Council (FTC) is the final hurdle Broadcom must overcome. According to The Register, the regulator is not commenting on the CMA’s decision or the status of its own investigation. The talks have been rumored to have been held behind closed doors since April this year. With the UK and EU agreeing, it shouldn’t be long before the FTC makes its views known.
Source: IT Daily
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