Broadcom looks for EU approval of VMware takeover
If antitrust regulators aren't happy, the deal won't go through
Broadcom has begun the process of getting European Union approval for its proposed $61 billion takeover of cloud and virtualization biz VMware, which the company hopes to close within its current fiscal year.
The takeover was officially notified to the European Commission for antitrust scrutiny on November 15, according to an entry in the executive body's Competition Policy website. It states that a provisional deadline for a decision on the merger is December 20, but has yet to publish an official release with details.
According to reports, Broadcom is angling for the merger to be approved at this stage, rather than the European Commission deciding it needs more in-depth analysis, which could add months to the approvals process.
"We are confident that this deal does not present any competition issues and look forward to working with the European Commission throughout this process," the company said in a statement.
As we reported last month, Broadcom hopes to convince EU regulators to green light its takeover by arguing there is already plenty of competition in the relevant market sectors from the likes of public cloud operators, including Microsoft, AWS, and Google, and that its merger will actually increase buyer choice.
However, it is understood that the US Federal Trade Commission is also scrutinizing the proposed takeover, which could also derail the sale.
The fabless semiconductor outfit confirmed its intention to acquire VMware in May, following the latter's spinout from Dell last year, with the boards of directors of both organizations unanimously approving the $61 billion purchase.
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However, VMware customers were less pleased with the proposed takeover. Attendees at one of the company's user group conferences in Melbourne, Australia told The Register that they feared the worst, having seen previous Broadcom takeovers that resulted in price hikes and less investment in product development.
Broadcom has denied this, with the company's president and CEO Hock Tan even writing a blog post last month to state that increasing the prices of VMware products is not part of his strategy.
In July, the 40-day "go-shop" period under which VMware could solicit alternative proposals as part of the merger agreement expired, clearing the way for the Broadcom acquisition to proceed.
Assuming that Broadcom gets over the regulatory hurdles, the company expects the transaction to complete some time in its fiscal year 2023, which started this month. ®