broadcom he is going to have to wait a bit to be able to execute your offer to purchase VMware, because it will take a while to have all the permissions it needs to be effective. The European Union He has already warned that he is going to open an antitrust investigation of the operationwhich will be long and exhaustive. From Brussels they have considered that the agreement can harm competition in the technology industry at a global level, which has motivated the decision.
Broadcom is already in preliminary negotiations with European Union officials, who will examine whether the merger could lead to abusive behavior, including possible future price increases for the chipmaker, according to the Financial Times. This is not something unexpected either, since there are many companies that face this type of investigation. It is known in the market as a phase 1 investigation, and it usually takes several months to complete.
But according to several sources, the EU authorities plan to carry out another investigation when this one is concluded, a “phase 2”, which could take even more than a year to conclude, and even undo the agreement. Nvidia already knows very well how this can happen, since as a result of these processes its ARM purchase offer finally foundered. And as in this case, the fact that Broadcom can buy VMware has not pleased some entities, which have already written to the EU to allege that VMware customers could in the future be forced to buy or subscribe to Broadcom services.
To justify their doubts, they point to two purchases that Broadcom has made not long ago, CA Technologies and Symantec, as an example of how Broadcom puts competition at risk. In both cases, they say, the operation has led to a price increase. For this reason, among others, they ask Brussels to block the agreement for anti-competitive practices.
In addition to investigations in the EU, the purchase agreement may have to pass several more investigations. Broadcom expects US authorities to open a, and could also arrive from the United Kingdom and China. Despite this, the company does not want the deal to be compared to that of Nvidia, a case where Nvidia’s competition relied on licensing deals to use ARM’s chips.