The British competition watchdog said that it is considering if the proposed deal would lead to a significant reduction in competition within any market or markets in the UK for services or goods
The UK Competition and Markets Authority (CMA) plans to launch an investigation into the previously announced American semiconductor manufacturer Broadcom’s $61bn acquisition of cloud computing and virtualisation technology firm VMware.
The British competition watchdog said that it is considering if the deal would lead to a significant reduction in competition within any market or markets in the UK for services or goods.
For helping with its assessment, the CMA is seeking comments on the proposed acquisition from interested parties. The last date for filing the comments is 6 December 2022.
The dates for the deadline for the phase 1 decision and launch of the merger inquiry are yet to be confirmed by the anti-trust regulator.
The cash-and-stock deal between Broadcom and the California-based VMware was announced in May 2022.
By acquiring VMware’s platform, Broadcom hopes to offer its enterprise customers an expanded platform of critical infrastructure solutions.
As per the terms of the transaction, shareholders of the publicly-listed VMware will receive either $142.5 in cash or 0.252 shares of Broadcom shares for each VMware share.
On closing of the deal, current Broadcom shareholders will hold an interest of about 88% in the combined company, while current VMware shareholders will own the remaining stake of about 12%.
Post-acquisition, Broadcom intends to rebrand its enterprise software portfolio, Broadcom Software Group, as VMware. The expanded software entity will include the existing infrastructure and security software solutions of Broadcom.
Subject to regulatory approvals and other conditions such as approval from VMware’s shareholders, the deal was originally expected to close in the fiscal year 2023.