EU approves Broadcom’s $61 bn VMware acquisition

LONDON: The European Commission (EC) on Wednesday formally approved US-based hardware company Broadcom’s $61 billion acquisition of desktop virtualisation software major VMware, with certain conditions.

The Commission found that the proposed acquisition, as modified by the commitments, would no longer raise competition concerns and would maintain competition on the market for FC HBAs (Fibre Channel Host-Bus Adapters).

The approval is conditional upon full compliance with the commitments offered by Broadcom.

Broadcom holds a very strong position in the market for the supply of certain hardware components. VMware is a key server virtualisation software provider.

“By acquiring VMware, Broadcom could restrict or degrade interoperability between VMware’s leading server virtualization software and some competing hardware components. But the commitments offered by Broadcom will enable its only rival Marvell, to continue competing on equal footing and ensure a similar protection for any future entrants,” said Margrethe Vestager, Executive Vice-President in charge of competition policy.

To address the Commission's competition concerns in the worldwide market for the supply of FC HBAs, Broadcom offered comprehensive access and interoperability commitments to Marvell and to any potential future entrant.

Furthermore, Broadcom committed to implementing an organisational separation between the team working on Broadcom's FC HBAs and the team in charge of third-party certification and technical support.

“The Commission's decision is conditional upon full compliance with the commitments, which will be in place for 10 years,” it said in a statement.

The Federal Trade Commission (FTC) in the US is currently investigating the deal.