The UK has provisionally agreed to buy over 61,000 million VMware by Broadcom

The UK’s Competition and Markets Authority (CMA) has provisionally concluded that Broadcom’s agreement to buy VMware for $69,000 million (€61.387 million) “will not dampen competition” in supplying critical components for servers.

The commission, which will listen to the opinions of the concerned parties until next April 9, warned that “today’s results are provisional, and the commission will now consult on it and listen to any other point of view before reaching a final decision.” It issues its final report, which has a deadline of September 12, 2023.

The British regulator decided last March to open an in-depth investigation into the process after identifying competition concerns, although after examining evidence gathered from Broadcom, VMware and other interested parties, an independent CMA panel provisionally decided it was not. It will significantly reduce competition in the supply of server hardware components in the UK.

In this regard, the committee initially considers that the potential financial benefit to Broadcom and VMware of making competing products perform worse with VMware will not outweigh the potential financial cost in terms of lost business, while also finding that the transaction is unlikely to harm innovation.

“Computer servers, which often use Broadcom and VMware products, play an important role in enabling us to work in the office or at home, access television programs or use banking services,” said Richard Vessey, chair of the committee. He did the research.

“After careful consideration of a wide range of evidence, we have provisionally found that this agreement will not harm competition.”

US integrated circuit manufacturer Broadcom reached an agreement in May 2022 to acquire cloud software company VMware for $61,000 million in cash and stock, in addition to taking on another $8,000 million (7,442 million euros) in debt to the company.

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The European Commission last week announced its approval of Broadcom’s purchase of VMware, although it conditioned its agreement on Broadcom fulfilling all of its obligations to ensure competitors’ access to the interfaces and source codes for the fiber-optic cards.

In order to respond to and green-light the skepticism from Brussels, Broadcom has committed to ensuring that third parties have access to interoperability application interfaces as well as to the materials, tools, and technical support required to develop and adopt FCs. .

Another obligation relates to granting access to the source code to all current and future Broadcom FC HBA drivers through an irrevocable open source license, which would in effect allow Marvell or other parties to manipulate VMware’s server virtualization software and allow them to reuse and modify the Broadcom drivers for their use. private.

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