The European Commission has reached an initial conclusion in its investigation into Broadcom’s proposed acquisition of VMware. It fears that the acquisition may jeopardize market competition.
In its initial findings, the EC states that the proposed acquisition may affect competition in the European chip market. In particular, this concerns competition in the market for FC HBA processors and storage adapters.
Combination
FC HBA processors and storage adapters can often be combined with VMware’s virtualization software. The EC is concerned that Broadcom may end up restricting or delaying access to VMware software to competitors if the deal goes ahead.
Broadcom is a major player for NIC modules, FC HBA processors and storage adapters. Limiting access to VMware for other manufacturers would lead to higher prices and make innovation more difficult.
The EC is also looking into whether Broadcom might stop offering the VMware platform standalone. No announcements on this have been made at this time.
Broadcom may appeal
Broadcom has been notified of the findings and will have a chance to respond. The EC expects to issue a final ruling on the possible acquisition by the end of June.
The takeover worth €57 billion ($61 billion) should have been completed in February, but has been delayed by various competition investigations.
In addition to the EC, competition authorities in the UK and the US are also investigating the deal. Broadcom now expects the acquisition to become final by Oct. 30 of this year.
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