Broadcom is preparing to overcome a major obstacle in its process of acquiring VMware, a specialist in virtualization software. Announced in May 2022, this takeover is being analyzed by regulators, who want to ensure that the operation will not hinder competition in the electronic components market.
According Reuters, it seems well underway on the Old Continent, since the EU antitrust watchdog should give its blessing. However, it would be linked to corrective measures relating to Broadcom’s interoperability with its rivals, according to sources familiar with the matter cited by the news agency.
Verdict expected in July in the UK
This outcome in favor of Broadcom should take place by July 17 and put an end to the in-depth investigation launched by the European Commission at the end of 2022. Brussels estimated that the American giant could be tempted to “deteriorating the interoperability of VMware’s server virtualization software with competitors’ hardware to the benefit of its own hardware [et] crowd out competitors’ hardware by preventing them from using VMware’s server virtualization software, or by impairing their access to such software”.
In the eyes of Margrethe Vestager, Executive Vice President in charge of Competition Policy, “the result could be higher prices, less choice and less innovation for customers and consumers”. Finally, the recommended remedies would reassure the European authorities.
However, even with the green light from Brussels, the American group will still have to fight in the United Kingdom and the United States, where the acquisition of VMware is currently being studied. Across the Channel, the competition authority (CMA) is due to issue its provisional conclusions on the operation and possible remedies next month to mitigate its anti-competitive effects. Broadcom was probably not reassured by the decision of the CMA in the file of the mega-acquisition of Activision Blizzard by Microsoft. The organization had blocked this operation, which had not failed to enrage Brad Smith, the president of the American giant. Conversely, the EU approved the acquisition.