The European Commission has just given its approval for the takeover of VMware by Broadcom, but imposes conditions on the tech giant.
Worth $61 billion, this acquisition is one of the largest in the history of the technology sector. Logically, it attracted the suspicions of regulators, and in particular the European Commission, which launched an in-depth investigation into it.
The EU gives the green light…
It’s not just Microsoft and its takeover of Activision Blizzard that have problems with the authorities. After several months of investigation, Brussels has finally delivered its verdict and authorized Broadcom to carry out the operation. “ Clearance is conditional upon full compliance with commitments offered by Broadcom “, underlines the Commission in a press release. This takeover will allow the company to diversify beyond hardware by expanding deeper into enterprise infrastructure software.
However, regulators were concerned about its impact on competition in the markets in which Broadcom currently operates. More precisely, ” Broadcom would have the ability and motivation to lock in Marvell, its only competitor in the HBA FC supply market [NDLR : contrôleurs hôtes de bus Fibre Channel]by restricting or degrading the interoperability between VMware’s server virtualization software and Marvell’s hardware components, which would impede Marvell’s competitiveness in a market where Broadcom is dominant “.
The European Commission notified its concerns to Broadcom, which proposed corrective measures. These were accepted by the decision makers.
… but under certain conditions
Thus, Broadcom must guarantee access to ” interoperability application programming interfaces as well as materials, tools and technical support allowing competing companies to exploit VMware’s virtualization software. And this, under the same conditions as Broadcom.
The company must also implement an organizational separation between the team working on its own FC HBAs and the team responsible for certification and technical support for third parties “.
This green light from Brussels is good news for Broadcom, but the takeover has not yet been validated. UK and US regulators are also on the lookout and have yet to share their decision. For comparison, the European Commission validated the acquisition of Activision Blizzard by Microsoft, but the antitrust authorities of the United States and the United Kingdom, they opposed it.
Source : European Commission
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