The UK’s Competition and Markets Authority (CMA) has provisionally cleared Broadcom’s $69 billion acquisition of VMware. It said that should the deal go ahead, it would not weaken competition in the supply of critical computer server products.
The CMA initially performed a Phase 1 investigation into the deal and found some competition concerns so it did a Phase 2 inquiry. After looking at the evidence from the two companies, it said that the deal wouldn’t substantially harm competition.
It said that Broadcom’s hardware and VMware’s software are used by thousands of businesses and public bodies in the UK including government departments, banks, and retailers so competition issues could have been problematic.
Commenting on the decision, Richard Feasey, chair of the independent inquiry panel carrying out the investigation, said:
‘Computer servers – often using the products of Broadcom and VMware – play a critical role in enabling us to work in the office or at home or to access TV shows or use banking services.’
‘That’s why it’s important we investigate this deal to ensure that UK businesses continue to benefit from competition and innovation in the supply of server components. After carefully considering a broad range of evidence, we have provisionally found that this deal would not harm competition.’
While it’s a positive development for the two companies, it’s important to note that this is a provisional decision, not a final one. The CMA will now consult on its findings and listen to the feedback before passing a final decision.
It will hear responses from interested parties until 9 August 2023 and then a final report will come out a month later by 12 September 2023.
Microsoft has had a lot of coverage recently as it tried to get its acquisition of Activision Blizzard past the CMA. It has still not managed to get the acquisition approved by the regulatorr but it is in talks to see how the issue can be resolved.