Britain Clears Broadcom's USD 61 Billion To Acquire VMware

CIOTechOutlook Team | Tuesday, 22 August 2023, 02:54 IST

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After all the commotion, the UK's competition watchdog has approved Broadcom's acquisition of VMware without condition. The merger, however, still has a potential hurdle from China, thus it cannot be regarded as finalized. The $61 billion acquisition of VMware by cloud and virtualization specialist Broadcom has been approved, according to the Competition and Markets Authority (CMA), which stated that it had examined the available data and discovered no concerns regarding possible competition.
 
Following the CMA's initial determination in March that the acquisition called for a thorough review, the purchase by Broadcom was given a preliminary green light in July. This was in response to concerns highlighted during the Phase 1 examination that the merger may hinder innovation and allow Broadcom to restrict VMWare's interoperability with competing networking devices.
 
According to the CMA, the independent panel that performed the Phase 2 investigation concluded that any potential financial gain to Broadcom and VMware by making competing devices incompatibile with VMware's software would not outweigh the potential financial penalty non terms of lost revenue.
 
In order for Broadcom's competitors to make sure their hardware worked with VMware's platform, they would need to share commercially sensitive information with VMware. This raised the question of whether the deal may hinder innovation. The panel determined that this is unlikely to be a problem because VMware will only need to know this information after it is too late for Broadcom to benefit commercially.
 
As a result, the panel upheld its final judgment that the combination would not significantly lessen competition and granted permission for it to proceed in the UK.
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