Broadcom-Vmware Deal Under EU Purview Over Antitrust Concerns - Broadcom (NASDAQ:AVGO)

The European Commission launched an in-depth investigation to assess, under the EU Merger Regulation, the proposed acquisition of Vmware, Inc (NYSE:VMW) by Broadcom Inc (NASDAQ:AVGO).
The Commission is particularly concerned that the transaction would allow Broadcom to limit competition for specific hardware components that interoperate with VMware's software.
The Commission's preliminary investigation indicated restricted competition in the supply of NICs, FC HBAs, and storage adapters by degrading interoperability between VMware's server virtualization software and competitors' hardware and foreclosing competitors' hardware by preventing them from using VMware's server virtualization software or degrading their access to it.
Also Read: Broadcom's Target Company VMware Sees 3 Executives Depart As Part Of Restructuring
Those described above could lead to higher prices, lower quality, and less innovation for business customers and consumers.
The Commission will also examine whether Broadcom may hinder the development of SmartNICs by other providers.
The Commission also looked to examine whether Broadcom may start bundling VMware's virtualization software with its software reducing choice and potentially foreclosing rival software providers.
The Commission now has until 11 May 2023 to take a decision.
The U.K.'s Competition and Markets Authority also scrutinized the deal, the Wall Street Journal reports.
The U.S. Federal Trade Commission sought information about the deal from the companies.
The deal would further Broadcom's push into software, nearly tripling the size of the company's software division.
Price Action: AVGO shares traded higher by 1.03% at $549.63 in the premarket on the last check Wednesday.

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