‘EU approves Broadcom’s acquisition of VMware’

‘EU approves Broadcom’s acquisition of VMware’

This week Reuters reported that US chipmaker Broadcom stands to obtain “conditional” EU antitrust approval for its proposed $61 billion (€57 billion) acquisition of cloud computing firm VMware.

The decision, pending since March, increased Broadcom shares by almost 5%, according to the report.

The approval by the European Commission is conditional on Broadcom’s ability to demonstrate remedies to address competition concerns. Specifically, Broadcom will have to show that interoperability with rivals would be accommodated post-acquisition.

Remedies sought on competition issues

One such remedy sought concerns Fibre Channel Host-Bus Adapters (FC HBAs) and is targeted at rival Marvell Technology, sources told Reuters.

FC HBAs are storage adapters that connect servers to storage located outside the server on a storage-area network using the fiber channel protocol, typically through a switch. Broadcom is a leading supplier of FC HBAs.

Marvell Technology did not respond to a request for comment, Reuters said.

Broadcom faces antitrust challenges worldwide

Broadcom also faces scrutiny in the United Kingdom where the Competition and Markets Authority (CMA) plans to announce its provisional findings about the deal next month, along with any possible remedies if required.

Companies have became more wary about the CMA in April, after the British regulator blocked Microsoft’s Activision Blizzard deal even though the EU had cleared it.

The US Federal Trade Commission is also investigating Broadcom’s VMware acquisition.

Broadcom supplies chips used in data centres for networking and specialised chips that speed up AI work. The company announced the VMware deal last year, sating they wanted to diversify into enterprise software. According to Reuters, Broadcom’s pivot into software started after its attempt to acquire mobile chip giant Qualcomm “was blocked by former US President Donald Trump in 2018 on national security grounds”.

Both the EU antitrust watchdog, which is scheduled to decide on the deal by July 17, and Broadcom also declined to comment.