L’European Union (EU) calls for a comprehensive investigation into the takeover offer from 61 billion dollars Of Broadcom to buy VMware. After a preliminary analysis, Europe thinks that the agreement could allow a Broadcom to “narrow down competition” in key telecommunications markets. Such as network adapters, fiber channel host-bus adapters, and storage adapters.
EU investigates Broadcom’s bid for VMware
The European Union appears concerned that the deal could limit interoperability between hardware rivals and VMware’s server virtualization services. He also fears the company could prevent or degrade access to VMware’s software for rivals. This, according to the EU, could lead to “higher prices, lower quality and less innovation for client companies, and finally consumers”.
The Commission will also investigate whether Broadcom could block rivals such as Nvidia and Intel from building intelligent network interface cards. In particular, he mentions Projec Monterey, an industry-wide, industry-wide effort that VMware participated in in 2020. “Broadcom may diminish VMware’s commitment to Project Monterey to protect their NIC revenues”.
The union also fears that Broadcom might bundle VMware software, reducing the possibility of choice for companies that use the company.
Broadcom’s acquisition of VMware is one of the largest of 2022 and in absolute terms: there was no doubt that the EU was scrutinizing this deal closely. The Commission will not necessarily block the process, but the investigation could slow down the transaction.
The Commission has 90 working days (or until 11 March 2023) to decide on the deal. If it does not go through, the agreement rewould recall Broadcom’s attempt to buy Qualcomm in 2018: at the time it was the US administration led by Trump that blocked the acquisition.
We will keep you updated on the matter.