CMA Probing Into Proposed Broadcom, Vmware Merger

(RTTNews) - Competition and Markets Authority or CMA, the UK's market regulator, said on Wednesday that it is opening a probe into Broadcom Inc. 's (AVGO) proposed $61 billion acquisition of Vmware Inc. (VMW).

The regulator will start its investigation into the matter on January 26, 2023. The deadline for the CMA to declare its verdict on whether to refer the merger for a Phase 2 probe is March 22, 2023.

In December 2022, the European Commission had launched an investigation into the merger deal citing concerns that the transaction would allow Broadcom to restrict competition in the market for certain hardware components.

This may result in higher prices, lower quality and less innovation for business customers, and ultimately consumers.

In May 2022, Broadcom had agreed to buy VMware in a $61 billion cash-and-stock deal. In addition, Broadcom would assume $8 billion of VMware net debt.

Broadcom is a provider of semiconductor and infrastructure software products, whereas VMware is a software provider offering mainly virtualization software which interoperates with a wide range of hardware, including NICs, FC HBAs and storage adapters.