The UK’s Markets and Competition Authority (CMA) believes that the latest acquisition by Broadcom which bought VMware could significantly reduce the competition in the market. This operation cost a year ago to 56,750 million of cash requires a very deep investigation if the parties do not offer a service that addresses the shooting concerns.
In a preliminary investigation of the merger, the CMA considered whether the deal would affect the supply of software and hardware products and whether Broadcom could hinder its competitors. “The broad consensus to buy VMware is less innovative and increases the cost of computers that are used for government, banking and telecommunications purposes,” the authority says.
In this regard, he believes that VMware has a dominant position in server virtualization software and that compatibility with its software is essential for the hardware components sold by Broadcom and its rivals. Thus, the CMA expressed concern that the deal could allow Broadcom to hurt its rivals by less providing them with VMware-compliant hardware components such as NICs and storage adapters, reducing competition and ultimately, customer options.
In addition, the research also suggests that the merger could lead to Broadcom’s access to sensitive data that its rivals VMware currently support, while harming innovation and leaving the customer worse off by adding fewer product updates or new features.
In addition, it now has five business days for the CMA to present legally binding proposals to the concerns raised by the director, who have another five business days to decide whether to resolve their issues or whether the case should be referred to the next stage. an in-depth investigation.
The US environment manufacturer Broadcom has reached an integration agreement in May 2022 to acquire the cloud software company VMware for 61,000 million dollars in cash and shares, in addition to assuming another 8,000 million dollars (7,442 million dollars) in debt.
Last December, the European Commission announced an in-depth investigation into whether Broadcom’s purchase of VMware could harm the industry by restricting competition in the market for some components that are interoperable with VMware software.