EU Reportedly Plans to Approve Broadcom's $61 Billion VMware Acquisition

Broadcom could finally be getting a key regulatory approval of its planned $61 billion VMware acquisition.

The European Commission reportedly is set to provide conditional antitrust approval, according to Reuters, citing people familiar with the matter. The Commission’s clearance is tied to Broadcom’s interoperability remedies to address competition concerns. One focuses on Fiber Channel Host-Bus Adapters (FC HBAs) and is targeted at rival Marvell Technology, one of the people said.

Look for the Commission to decide on Broadcom’s VMware acquisition by July 17.

We couldn’t reach Broadcom for comment. It’s unclear whether there are other regulatory approvals pending.

In-Depth Investigation Into VMware Acquisition Impact

In December, the Commission opened an in-depth investigation to assess if Broadcom’s acquisition of VMware may restrict competition in the market for the supply of network interface cards (NICs), FC HBAs and storage adapters.

In addition, the Commission had concerns that Broadcom may hinder the development of SmartNICs by other providers, and start bundling VMware’s virtualization software with its own software and no longer offer VMware‘s virtualization software as a standalone product.

In April, the Commission said Broadcom may restrict competition for the supply of FC HBAs and storage adapters. It could do so by foreclosing competitors’ hardware by delaying or degrading their access to VMware’s server virtualization software.

“Broadcom is the leading supplier of FC HBAs and storage adapters,” the Commission said. “The markets are very concentrated.”

Broadcom competitors could be hampered in their ability to compete in these markets, the Commission said. This, in turn, could lead to higher prices, lower quality and less innovation for business customers, and ultimately consumers.

The deal expands the depth of critical infrastructure solutions both companies can provide to enterprise customers. In addition, Broadcom is heavily expanding its software portfolio.