Broadcom Seeks Early European Approval For VMware's $61B Buyout

Vandana Singh
1 min read
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In this article:

  • In a bid to diversify its business into enterprise software, U.S. chipmaker Broadcom Inc (NASDAQ: AVGO) agreed in May to acquire cloud computing company VMware Inc (NYSE: VMW) for $61 billion.

  • The company is seeking early European Union antitrust approval by pointing to competition from Amazon.com Inc (NASDAQ: AMZN), Microsoft Corp (NASDAQ: MSFT), and Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL).

  • Tech deals have drawn intense scrutiny from regulators worldwide concerned about power concentration, Reuters reported.

  • "This (deal) is creating more competition in the cloud market where there are very big players now. This doesn't have to go to phase two at all," the report quoted one of the people familiar with the matter, referring to the European Commission's four-month-long second phase investigation.

  • "For the Commission to go to phase two, there has to be a real competition problem - horizontal, vertical, foreclosure risk - and I think we can show those risks don't really exist in this case," the report added.

  • "In the last five years, what we have seen is an exponential growth of competitive pressure on VMWare on the part of those competitors that the Commission didn't take into account," the report cited another person, referring to Amazon, Microsoft and Google, the top three cloud services providers.

  • "This should be a first phase investigation based on the facts," the person said, referring to the EU preliminary merger review.

  • Price Action: AVGO shares traded higher by 1.61% at $433.99 in the premarket on the last check Monday.

  • Photo Via Company

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