The European antitrust enforcer “warns” that the deal could restrict market competition.
This week Reuters reported that US chipmaker Broadcom will be hit with an EU antitrust “warning” about the possible anti-competitive effects of its proposed €57 billion bid for VMware.
The chipmaker’s acquisition of the cloud computing company would allow Broadcom to restrict competition in the market for certain hardware components which interoperate with VMware’s software, according to the European Commission, which opened an investigation into the deal in December.
Broadcom has told the EU competition watchdog that the presence of Amazon, Microsoft shows that there is strong competition in the cloud computing market, people familiar with the matter told Reuters in October. But Broadcom also notified the US’s Securities and Exchange Commission (SEC) earlier this month that it wants to attack hyperscalers such as AWS, Microsoft Azure and Google Cloud after its acquisition of VMware.
The EU competition authority is set to decide on the deal by June 7, however at this time they are declining to comment, Reuters said.
Broadcom remains undaunted
Broadcom said it would continue its “constructive work” with the Commission. But while the deal has been approved in Brazil, South Africa and Canada, the UK’s Competition and Markets Authority is investigating the acquisition.
Moreover, the US Federal Trade Commission issued the two companies received a “second request” for information about their deal last July. This, Reuters says, indicates that the US agency will “closely scrutinise” the deal. Indeed, US antitrust enforcers have tried to block a large number of deals during the Biden administration because of concerns over concentration and the resulting stunted competition in the US economy.
Despite the dust-ups with antitrust watchdogs on both sides of the Atlantic, Broadcom execs remain optimistic. “We continue to expect the transaction will close in Broadcom’s fiscal year 2023,” the company said.
1 day ago
