# EU opens antitrust probe into Broadcom’s $61 billion VMware bid
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-12-21
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: European antitrust regulators investigate Broadcom's
Meta Description: The European Commission has raised concerns over Broadcom's bid for VMware, fearing it could restrict competition and lead to higher prices for business
URL: https://financedigest.com/eu-opens-antitrust-probe-into-broadcoms-61-billion-vmware-bidhtml

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PARIS (Reuters) -European antitrust regulators have opened an in-depth investigation into U.S. chipmaker Broadcom’s proposed $61 billion bid for cloud computing company VMware, the European Commission said on Tuesday.

The Commission is particularly concerned that the transaction would allow Broadcom to restrict competition in the [market for certain hardware components which interoperate with VMware’s software,”](https://www.financedigest.com/event-management-software-market-to-rise-steadily-at-a-cagr-of-14-1.html "Event Management Software Market to rise steadily at a CAGR of 14.1%") the Commission said in a statement.

[Reuters reported](https://www.financedigest.com/indonesia-to-tighten-used-shoe-import-controls-after-reuters-report.html "Indonesia to tighten used shoe import controls after Reuters report") on Dec. 9 that the Commission was set to [open a full-scale investigation](https://www.financedigest.com/india-opens-new-investigation-into-bbc-in-widening-crackdown.html "India opens new investigation into BBC in widening crackdown") into the deal, the second biggest globally so far this year.

The Commission said its preliminary investigation indicates the transaction may allow Broadcom to restrict competition for the supply of certain components by degrading interoperability between VMware software and competitors’ hardware to the benefit of its own hardware.

This and other factors could lead to [higher prices](https://www.financedigest.com/vhs-tapes-selling-for-46000-higher-than-original-price.html "VHS tapes selling for 46,000% higher than original price"), lower quality and less innovation for business customers, and ultimately consumers, the Commission said.

The Commission now has 90 [working days](https://www.financedigest.com/one-in-three-brits-daydream-about-future-holidays-to-get-through-the-working-day.html "One in three Brits daydream about future holidays to get through the working day"), until May 11, 2023, to take a decision.

Broadcom on Tuesday reiterated that it continued to expect the transaction would close in its fiscal year 2023, adding it would [continuing to work with the European](https://www.financedigest.com/workday-continues-european-growth-with-italy-launch.html "Workday continues European growth with Italy launch") Commission.

It said it was making progress with regulatory filings around the world, having received legal merger clearance in Brazil, [South Africa](https://www.financedigest.com/inmobi-and-coca-cola-win-mma-smarties-south-africa-award-for-beat-can-campaign.html "InMobi and Coca-Cola Win MMA SMARTIES South Africa Award for Beat Can Campaign"), and Canada and foreign investment control clearance in Germany, France, Austria, and Italy.

The combination of Broadcom and VMware is about [enabling enterprises to accelerate innovation and expand](https://www.financedigest.com/forescout-and-fireeye-expand-partnership-enabling-faster-response-to-cybersecurity-threats.html "FORESCOUT AND FIREEYE EXPAND PARTNERSHIP, ENABLING FASTER RESPONSE TO CYBERSECURITY THREATS") choice by addressing their most complex technology challenges in this multi-cloud era, and we are confident that regulators will see this when they conclude their review,” it said in a statement.

The proposed acquisition underlines Broadcom’s ambition to diversify into enterprise software, but comes as regulators worldwide ramp up scrutiny of deals by [Big Tech](https://www.financedigest.com/startups-spring-from-ashes-of-big-tech-purge.html "Startups spring from ashes of Big Tech purge").

Broadcom had been banking on early EU approval of the deal by pointing to competition from Amazon, [Microsoft and Google](https://www.financedigest.com/microsoft-unveils-ai-office-copilot-in-fast-moving-race-with-google.html "Microsoft unveils AI office copilot in fast-moving race with Google") in the cloud computing market, people familiar with the matter told Reuters in October.

Beltug, a Belgian association of CIOs & Digital Technology leaders, and its counterparts France’s Cigref, CIO platform Nederland and VOICE Germany have previously voiced [concerns that the deal could lead to drastic price hikes](https://www.financedigest.com/shares-slip-yields-rise-as-u-s-data-sparks-rate-hike-concerns.html "Shares slip, yields rise as U.S. data sparks rate hike concerns") and tougher commercial practices against customers.

(Reporting by Foo Yun Chee, Editing by GV De Clercq and Louise Heavens)


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