Broadcom’s $61 billion VMware deal is being put through a regulatory crucible

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Orian Johnson

Regulators around the world are demanding guarantees that Broadcom will not limit its competitors’ access to VMware if the deal goes through.

Broadcom has just days to craft an argument that will placate government regulators who fear the San Jose, California-based semiconductor giant will use its control of VMware to hurt competitors and the market.

The UK’s Competition and Markets Authority (CMA) has given Broadcom until May 9 to provide a written response to a nine-page “Statement of Issues” that outlined its concerns about the $61 billion takeover.

The combined entity will be able to leverage VMware’s market power in server virtualization software to reduce the competitiveness of Broadcom’s hardware competitors by, for example, weakening competitors’ driver adoption of Ethernet network NICs, FC (Fiber Channel) HBAs, and storage adapters, and impeding access to the VMware API for competitors’ FC Switches,” regulators wrote there on April 21.

“The impact on competition could be significant given that relevant hardware markets are already relatively concentrated and interoperability with VMware server virtualization software is very important for server hardware manufacturers.”

(Related: Michael Dell’s ‘Confident’ Broadcom-VMware Deal Will End)

As Broadcom races to respond to the UK, the clock is also ticking on an internal deadline: May 26 is out of date. That’s the date when VMware, if the merger doesn’t close, can walk away without penalty. In February, both sides agreed to move the overseas date back 90 days. But the new deadline is less than a month away.

While the partners have often told CRN that they’re excited about some of the possibilities the deal could bring and are following along as it progresses, their clients don’t seem to care who owns VMware as long as it delivers the results they need.

“One thing we’ve noticed among our customer base is that they don’t necessarily care where VMware ends up,” said Gary McConnell, CEO of VirtuIT Systems, a New York-based solutions provider with a core services competency in VMware. “Technology is as powerful as driving, so it’s been business as usual in that regard.”

However, the UK’s Capital Markets Authority is not the only regulatory board with concerns about the sale.

The European Commission, the European Union’s competition watchdog, is sounding the alarm about the merger after a months-long investigation that began in December and included a look at Broadcom’s internal documents.

On April 12, the commission said it feared Broadcom could use VMware’s newly acquired technology to cut off competitors’ access to it, which could “in turn lead to higher prices, lower quality, and ultimately reduced innovation for business and consumer customers.”

“The commission is concerned that Broadcom may restrict competition in global markets for supplying FC HBAs and storage adapters by blocking competitors’ hardware by delaying or hindering their access to VMware server virtualization software,” the commission wrote in an April 4 filing.

Meanwhile in the United States, the Federal Trade Commission said CRN It still has not commented on what is now a 10-month in-depth investigation into the acquisition.

Broadcom has said repeatedly that it expects a merger of its proposed size with VMware to take longer to close. When Broadcom announced the sale on May 26, 2022, it said it expected to close during this fiscal year ending in October.

The deal has cleared regulators in Canada, Brazil and South Africa, but is still awaiting approval in China.

Here’s a summary of its stance with regulators around the world, plus what Broadcom and corporate leaders have to say.

    Meet O'Ryan Johnson

Orian Johnson

Orian Johnson is a veteran news reporter. He covers datacenter cadence for CRN and hopes to hear from channel partners on how to improve its coverage and write stories they want to read. He can be reached at

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