Broadcom’s $61bn VMware deal now faces a UK investigation

26 Jan 2023

Image: © wolterke/

The deal is already being probed by the European Commission because of concerns that Broadcom could restrict competition in the market for certain hardware components that interoperate with VMware’s software.

Broadcom’s planned acquisition of VMware is facing another challenge, as a UK authority has begun an investigation.

The Competition and Markets Authority (CMA) has launched the first stage of an investigation into the merger bid, to assess if it could impact competition within UK markets.

The $61bn deal was one of the largest announcements in the tech sector last year. If approved, it would see the Broadcom Software Group rebrand and operate as VMware, incorporating Broadcom’s infrastructure and security software as part of an expanded VMware portfolio.

But concerns have been raised about the potential this deal has in restricting competition, due to the power of both companies individually. Last month, the European Commission began an in-depth investigation into the merger bid.

Last November, the CMA opened an invitation from “any interested party” to comment on the proposed deal, while it considered whether to investigate.

The UK authority has given a date of 22 March to make a “phase 1 decision”, which could lead to more in-depth investigation. The watchdog hasn’t shared any specific data on what it will investigate and said this decision date could change.

Last month, the European Commission shared concerns that the deal would allow Broadcom to restrict competition in the market for certain hardware components that interoperate with VMware’s software.

For example, the EU investigation is examining whether Broadcom may hinder the development of smart network interface cards (smartNICs). This would be significant as VMware launched Project Monterey in 2020 with smartNIC sellers Nvidia, Intel and AMD Pensando.

The commission said Broadcom could decrease VMware’s involvement in this project to protect its own NIC revenues, which could “hamper innovation to the detriment of customers”.

Broadcom previously said the deal aligns with its strategy of scaling its software business and would offer new growth opportunities. The semiconductor giant took a big leap into the software sector when it acquired enterprise software vendor CA Technologies for almost $19bn in 2018.

It previously made a $103bn takeover bid for Qualcomm, but the deal was blocked by then US president Donald Trump in 2018 over national security concerns.

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Leigh Mc Gowran is a journalist with Silicon Republic