Home » News » The UK will look into Broadcom's proposed $61 billion acquisition of VMware in more detail.

The UK will look into Broadcom's proposed $61 billion acquisition of VMware in more detail.

(Image Credit Google)
Image Credit: Wiki For some time now, the UK's Competition and Markets Authority (CMA) has been looking into Broadcom's proposed $61 billion acquisition of VMware. The CMA has discovered enough red flags to start an extensive investigation into the proposed transaction. The government has previously issued a warning that a merger may raise the cost of storage adapters and network interface cards (NICs). The CMA has already appointed the enquiry group, which is made up of Chair Richard Feasey and three other members, and says it will refer Broadcom's proposed $61 billion acquisition of VMware for an in-depth investigation over serious antitrust concerns, including worries that it could result in a "substantial lessening of competition within a market or markets in the United Kingdom." After the chipmaker failed to provide guarantees that its acquisition of the computing and virtualization company wouldn't result in higher pricing for server hardware and software, the CMA made its decision. Early this month, the British antitrust watchdog disclosed its reservations about the merger and gave Broadcom five days to explain its position. In the past, Broadcom asserted that a merged company would benefit both companies and customers by increasing industry competition. Also, it stated that it would cooperate with the regulator to support its claim, but it declined to provide any commitments before the deadline of March 29. The comprehensive investigation by CMA could take up to six months. BroadCom Image Credit: Pemari The US Federal Trade Commission and the European Union's antitrust authority are also investigating the potential merger (FTC). While the latter is requesting additional information about the agreement from the two businesses, the former is preparing to launch an investigation into the acquisition on the grounds that it might allow Broadcom to limit competition in the server hardware sector. The most recent developments started when the CMA said in a statement last week that it was concerned about potential interoperability problems that might arise for businesses running VMware on non-Broadcom technology. Under such circumstances, the agency fears that clients may be forced to purchase Broadcom hardware rather than leave VMware for its competitors. Read More: Apple Files an Appeal Amid Privacy Issues from a UK Watchdog The CMA is well renowned for taking proactive measures to safeguard competition in all industries and for standing its ground when antitrust issues have arisen in the past. After determining that the acquisition would significantly lessen competition and restrict choice for UK social media users, the regulator in October ordered Facebook's parent company Meta to sell the animated GIF platform, Giphy.

By Omal J

I worked for both print and electronic media as a feature journalist. Writing, traveling, and DIY sum up her life.


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