London, United Kingdom – Britain has provisionally cleared US chipmaker Broadcom’s planned $61-billion takeover of cloud computing firm VMware, regulators announced Wednesday, one week after it won EU approval.
Following a probe, the Competition and Markets Authority said the deal “would not weaken competition in the supply of critical computer server products”.
The CMA in March said the deal could harm innovation and drive up the cost of computer parts used by key clients including banks, retailers and telecoms, as well as government departments and other public institutions.
However, the regulator said Wednesday that Broadcom’s purchase of VMware, which sells software products and software enabling servers to function more efficiently, would not damage innovation.
Richard Feasey, who chaired an independent panel for the CMA investigation, said consumers would remain boosted by cheaper prices in a competitive marketplace.
“Computer servers — often using the products of Broadcom and VMware — play a critical role in enabling us to work in the office or at home or to access TV shows or use banking services,” Feasey said.
“That’s why it’s important we investigate this deal to ensure that UK businesses continue to benefit from competition and innovation in the supply of server components.”
The CMA said it would now consult on its findings before reaching a final decision.
Broadcom is seeking to expand into the software market to boost its server business and has already acquired two complementary firms, CA Technology and Symantec.
