Broadcom has confirmed that its acquisition of virtualisation giant VMware is now on track to close on 30 October 2023 after the proposed merger secured regulatory approval from the UK’s Competition and Markets Authority (CMA).
The CMA published a statement on 21 August 2023 confirming that, in line with its provisional judgement on the merger, there are no competitive grounds to prevent the deal going ahead.
“Even if the UK market represents a small proportion of total sales in a merger, the CMA’s job is to scrutinise deals like this thoroughly to ensure they don’t harm competition in the UK,” said Richard Feasey, chair of the independent panel overseeing phase 2 of the CMA’s inquiry into the VMware-Broadcom merger.
“In this case, having carefully considered the evidence and found no competition concerns, we have concluded the deal can go ahead.”
The statement marks the end of a five-month probe by the UK competition watchdog into the $61bn deal, after the CMA initially raised concerns in March 2023 that if it were to proceed unchallenged there was a possibility it could hamper innovation and drive up the cost of acquiring servers for UK businesses and public sector organisations.
The CMA originally gave Broadcom five working days to issue an undertaking to address its concerns about the deal, before the authority confirmed the company had declined this offer, prompting the CMA to investigate the deal further with a phase 2 investigation.
This probe was originally intended to run until 12 September 2023, but drew to a close shortly after the CMA published the provisional findings of the phase 2 investigation in mid-July 2023 that stated the deal does not weaken competition.
Broadcom confirmed in a statement the deal – which was first announced in May 2022 – will now close at the end of October 2023, and that the company is in the throes of obtaining the remaining regulatory approvals needed to do so.
“Broadcom continues to work constructively with regulators in other jurisdictions and is in the advanced stages of the process towards obtaining the remaining required regulatory approvals, which Broadcom believes will be received before October 30, 2023,” the company said, in a statement.
“Broadcom is confirmed that the combination with VMware will enhance competition in the cloud and benefit enterprise customers by giving them more choice and control over where they locate their workloads.”
In a separate statement, a spokesperson for VMWare added: “We are pleased that Broadcom’s acquisition of VMware has received clearance in the UK and continues to move forward in other jurisdictions. We expect the deal to close in Broadcom’s fiscal year 2023.”