UK Competition Watchdog Probes $61bn Broadcom-VMware Buy


UK follows EU in launching initial investigation of $61 billion Broadcom deal to buy VMware amidst closer attention to big tech deals

The UK competition regulator, the Competition and Markets Authority (CMA), said on Monday it was conducting an initial review of Broadcom’s proposed $61 billion (£51bn) acquisition of VMware, announced in May.

The deal is the second-biggest acquisition so far this year, after Microsoft’s $68.7bn buy of Activision Blizzard, announced in January, which remains under review by regulators.

Large tech deals have been attracting close regulatory scrutiny amidst concerns of excessive market power being concentrated in the hands of a few players.

broadcom, merger, vmwareRegulatory probe

This led Nvidia to abandon its proposed buyout of chip designer ARM in February, after pressure from regulators in the US and elsewhere over the deal.

However, in Broadcom’s case the chipmaker would diversify the firm’s business beyond its primary chipmaking operations, which may give it more leeway.

In July the US Federal Trade Commission (FTC) said it would undertake a more in-depth “second look” investigation of the deal, in line with a policy announced in September 2021.

Broadcom disclosed the investigation last month, saying it was “common practice” for such a large deal.

EU investigation

Last week EU regulators said they would begin looking into the merger after being formally informed of the deal by Broadcom.

“We are confident that this deal does not present any competition issues and look forward to working with the European Commission throughout this process,” Broadcom said at the time.

The company said it was making progress with its various regulatory filings around the world and expected the transaction to be completed in its fiscal year 2023.