$61-billion VMware deal: Broadcom to get warning from regulators

US chipmaker Broadcom is set to receive an European Union (EU) antitrust warning about the possible anti-competitive effects of its proposed $61 billion bid for cloud computing company VMware in the coming weeks, sources said.

The European Commission opened an investigation in December, saying the deal, announced last year, would allow Broadcom to restrict competition in the market for certain hardware components which interoperate with VMware’s software. The EU competition enforcer, which will decide on the deal by June 7, declined to comment. The Commission will set out its concerns in a statement of objections, the sources said. 

Companies can subsequently ask for a closed hearing to defend their deals in front of senior Commission and national competition officials as well as rivals and the Commission’s lawyers. Broadcom said it would continue its “constructive work” with the Commission. The deal has received the green light in Brazil, South Africa and Canada, while the UK competition watchdog is investigating the acquisition.

“We continue to expect the transaction will close in Broadcom’s fiscal year 2023,” the company said.