EU says Broadcom’s proposed VMware deal could restrict competition

The European Commission on Wednesday said U.S. chipmaker Broadcom’s proposed $61 billion takeover of cloud computing company VMware could restrict competition in the market for certain hardware components.

The Commission said it had informed Broadcom of its objection that the deal could restrict competition in the global markets for the supply of so-called fibre channel host bus adapters and storage adapters, by limiting access for competitors’ hardware to VMware’s software.

Broadcom said it remained confident that regulators will eventually conclude that the takeover does not present any competition issues, and said it expected to close the deal “in fiscal year 2023”.

The EU’s objections follow an investigation into the deal opened in December last year, over concerns it would give Broadcom the opportunity to restrict competition in the market for certain hardware components which interoperate with VMware’s software.

Sources told Reuters in February Broadcom was set to receive an EU antitrust warning about the possible anti-competitive effects of its billion bid.

Broadcom has the opportunity to reply to the Commission’s objections and to request an oral hearing. Reuters