The U.K. Competition and Markets Authority (CMA) has announced plans to complete an in-depth probe into Broadcom's proposed $61B acquisition of VMware after the California-based chipmaker declined to offer remedies to alleviate the regulator's concerns.
The British regulator launched the first phase of its investigation into the deal in Jan. 2023 and concluded that it can "cut out competitors from the supply of hardware components to the server market and lead to less innovation."
In addition to hindering the competition and stifling innovation, the CMA also said that the deal could result in price hikes for computer parts and software.
- The CMA also claims that Broadcom did not offer any solutions in the five days it was allotted to do so, and thus, the U.K. regulator has opted to proceed with an in-depth inquiry.
- The CMA's allegations contradict a Broadcom spokesperson's statement, who said, "We will address the concerns raised and demonstrate that the transaction enhances competition and benefits businesses and consumers through increased quality, innovation, and choice."
- So far, the proposed buyout has been approved by regulatory agencies in Australia, Brazil, Canada, and South Africa. Meanwhile, the European Commission and the U.S. Federal Trade Commission have yet to formally decide on the deal.
- Broadcom maintains that the transaction will close within the 2023 fiscal year.
