The Competition and Markets Authority (CMA) has approved Broadcom’s acquisition of VMware. The regulator concluded that the acquisition will not have a significant impact on competition in the UK server hardware market.
The UK CMA reached this conclusion following an extensive ‘Phase 2′ investigation. This decision means that the investigation into the acquisition in the UK is complete; the CMA considers that competition in the server hardware market will not be significantly restricted following the completion of the Broadcom acquisition. The acquisition will therefore be authorized in the UK.
The CMA investigated whether Broadcom could potentially reduce support for competitors’ hardware through VMware software. According to the regulator, this would not outweigh the revenue losses Broadcom would face.
The CMA also investigated the acquisition’s potential to ‘stifle innovation’. The regulator assessed whether Broadcom’s competitors would need to share sensitive information with VMware to make their hardware work with VMware, and whether there were concerns that Broadcom would have access to that information, which the CMA said should only be shared with VMware at a relatively late stage, when it was ‘too late for Broadcom’s commercial benefit’.
Broadcom last year announced its intention to acquire VMware for US$61 billion. This is Broadcom’s largest acquisition to date. The deal was also recently approved by the European Commission; the EU gave its approval after Broadcom made various concessions and commitments. The acquisition is currently under investigation by the US Federal Trade Commission.