UK"s Competition and Markets Authority (CMA) has been in some Neowin news items in recent months because it is among the few regulators who have cited concerns with Microsoft"s $69 billion acquisition of Activision Blizzard. However, this is not the only multi-billion-dollar deal under scrutiny from the CMA, as the regulator has now launched an investigation into Broadcom"s acquisition of VMware.
For those unaware, Broadcom agreed to buy VMware for a massive sum of $61 billion through a cash-and-stock transaction. This also includes the $8 billion net debt that VMware owes to creditors that has to be paid off.
Many of our readers may be aware of VMware due to the company"s work in the software virtualization sector, Broadcom emphasized that the transaction "combines our leading semiconductor and infrastructure software businesses with an iconic pioneer and innovator in enterprise software as we re-imagine what we can deliver to customers as a leading infrastructure technology company".
Throwing a wrench in Broadcom and VMware"s plans, the CMA has now launched a probe into the transaction. Just like the Microsoft-Activision deal, the CMA will be investigating if this acquisition, if successful, would result in a "substantial lessening of competition within any market or markets in the United Kingdom for goods or services".
The regulator has already solicited comments from interested parties and the results of the Phase 1 investigation are expected by March 22, 2023. If the outcome is not in favor of Broadcom-VMware, a more detailed Phase 2 investigation will begin shortly after.