The UK’s Competition and Markets Authority (CMA) has given the go-ahead for Broadcom to acquire VMware for $69 billion after it did an in-depth Phase 2 investigation. It escalated the investigation because Broadcom makes server hardware and VMware sells software for servers and wanted to ensure there were no competition issues.
‘Broadcom and VMware are US-based companies supplying hardware and software used by thousands of businesses and public bodies in the UK,’ said Richard Feasey, chair of the independent panel carrying out the Phase 2 inquiry.
‘Even if the UK market represents a small proportion of total sales in a merger, the CMA’s job is to scrutinise deals like this thoroughly to ensure they don’t harm competition in the UK.’
He continued on to say, ‘In this case, having carefully considered the evidence and found no competition concerns, we have concluded the deal can go ahead.’
With all these investigatory phases it can be a bit confusing working out whether the matter has now been settled or not, but the CMA in its announcement confirmed that this is a final decision and marks the end of its investigation.
During the Phase 2 inquiry, an independent panel did an in-depth investigation looking at new evidence and stakeholder feedback. It found that Broadcom’s purchase of VMware wouldn’t substantially reduce competition in the supply of server hardware components in the UK.
According to the CMA, it received a ‘significant volume’ of evidence from the two companies including 250,000 internal business documents. It also collected evidence from customers, other hardware providers, and virtualization software providers.
This acquisition is almost as large as Microsoft’s acquisition of Activision Blizzard which the CMA blocked back in April citing cloud gaming concerns.
Neowin reported in mid-July that the CMA has provisionally cleared Broadcom’s acquisition of VMware and that a final report would be out by 12 September; it looks like it’s well ahead of schedule. You can find the final report here.