European antitrust regulators have opened an in-depth investigation into US chipmaker Broadcom’s proposed $61 billion offer to cloud computing company VMware, the European Commission said on Tuesday.
“The Commission is particularly concerned that the transaction allows Broadcom to restrict competition in the market for some hardware components that interoperate with VMware software,” the Commission said in a statement.
Reuters reported on December 9 that the Commission was to open a full-scale investigation into the operation, the second largest in the world so far this year.
The Commission noted that its preliminary investigation indicates that the transaction may allow Broadcom to restrict competition in the supply of certain components by degrading interoperability between VMware’s software and competitors’ hardware to the benefit of its own.
This and other factors could lead to higher prices, lower quality and less innovation for business customers and ultimately consumers, according to the Commission.
The European Executive now has 90 business days, until May 11, 2023, to make a decision.
Broadcom reiterated Tuesday that it continued to expect the transaction to close in its fiscal year of 2023, adding that it would continue to work with the European Commission.
“The combination of Broadcom and VMware is intended to enable enterprises to accelerate innovation and broaden options to address more complex technology challenges in this multi-cloud era, and we are confident that regulators will see this when they complete their review,” he said. it’s a statement.