EU plans to launch antitrust probe into Broadcom’s $61 bln VMware deal: Reports

U.S.  based chipmaker Broadcom may face a setback from EU antitrust regulators as the latter is planning to have a full-scale investigation of the $61 billion deal of VMware, according to people familiar with the matter.

The proposed acquisition highlights that Broadcom is trying to diversify its business into enterprise software but regulators worldwide ramp up scrutiny of deals by Big Tech.

Broadcom had been banking on early EU approval of the deal by pointing to competition from Amazon, Microsoft and Google in the cloud computing market, people familiar with the matter told a news source in October.

The company had a so-called state of play meeting with European Commission officials earlier this week, the people said.

During such meetings the officials of the European Commission usually convey their concerns and if companies fail to convince them of the merits of their takeovers, they then launch a full-scale four-month long investigation once their preliminary review of the deal ends.

Due to the size of the deal, the company anticipates that the time-line for the review process would be extended in other key regions.

"Having said that, we're still confident that this transaction will close and be completed in our fiscal 2023," the company said.

Beltug, a Belgian association of CIOs & Digital Technology leaders, and its counterparts France's Cigref, CIO platform Nederland and VOICE Germany have previously voiced their fears that the deal could lead to drastic price hikes and tougher commercial practices against customers.

They also warned about the costs and the three to five year period required to switch from VMware to a rival, making it untenable for some customers to do so.