UK Regulator Gives Green Light to Broadcom Acquisition of VMware

Britain’s competition regulator has provisionally cleared the $69 billion Broadcom acquisition of VMware.

The Competition and Markets Authority (CMA) has ruled the deal would not weaken competition in the server market.

The CMA had been investigating any potential harm to Broadcom’s rivals stemming from the acquisition. This was due to the reduced interoperability of their I/O hardware and switches with VMware’s server virtualization software.

“The (CMA) panel found the deal would be unlikely to harm innovation, in particular since information about new product adaptations only needs to be shared with VMware at a stage when it is too late to be of commercial benefit to Broadcom,” said the regulator.

The approval follows the regulators from the European Union (E.U.) giving the Broadcom acquisition the green light last week. The E.U. regulators have for the past year pushed back on the proposed Broadcom-VMware union over fear that Broadcom would restrict competition in the region. But Broadcom has reportedly offered interoperability remedies to some rivals to address concerns, per Reuters.

“After examining the evidence gathered from Broadcom, VMware and other interested parties, an independent CMA panel has provisionally found the deal would not substantially reduce competition in the supply of server hardware components in the UK,” said the CMA.

Broadcom Acquisition Yet to Get U.S. Approval

Since declaring its intent to acquire VMware, Broadcom has faced hurdles. CEO Hock Tan has written several blogs aiming to clarify the company’s position on everything from competition and cloud sovereignty to channel strategy and relationships.

The $69 billion acquisition, consisting of $61 billion in equity and the rest in debt, is also being examined by the U.S. Federal Trade Commission. The organization has yet to say whether it will also approve the Broadcom-VMware deal. It too has expressed uncertainty about Broadcom’s hold on the server market.

Broadcom said it welcomes the CMA’s decision, according to Reuters. The company has also received legal merger clearance in Australia, Brazil, Canada, South Africa and Taiwan.

It said it expects to close the deal in the current fiscal year.