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The
Competition and Markets Authority's (CMA) provisional approval
of the takeover - Broadcom's biggest ever - follows a go-ahead
from European Union regulators last week after Broadcom offered
interoperability remedies to some rivals to address concerns.
"After examining the evidence gathered from Broadcom, VMware and
other interested parties, an independent CMA panel has
provisionally found the deal would not substantially reduce
competition in the supply of server hardware components in the
UK," the CMA said.
The proposed deal has highlighted chipmaker Broadcom's aim to
diversify into enterprise software, but comes as regulators
worldwide ramp up scrutiny of deals by Big Tech.
The British regulator, which had raised concerns in March that
the deal could make servers more expensive, said it would now
consult on its provisional approval before issuing a final
report by Sept. 12.
Broadcom welcomed the unconditional approval, saying it expects
to close the deal in the current fiscal year.
The CMA said it explored concerns that the deal could harm the
ability of Broadcom's rivals to compete if the merged company
were to make their products work less well with VMware's server
virtualisation software.
"The (CMA) panel found the deal would be unlikely to harm
innovation, in particular since information about new product
adaptations only needs to be shared with VMware at a stage when
it is too late to be of commercial benefit to Broadcom."
The $69 billion deal, consisting of $61 billion in equity and
the rest in debt, is also being examined by U.S. Federal Trade
Commission.
The CMA this year became the first major regulator to block
Microsoft's deal to buy "Call of Duty" maker Activision
Blizzard, but has since said it could look again at a modified
proposal. All sides involved are now working to resolve the
dispute.
(Reporting by Muvija M and Paul Sandle; editing by William James
and Jane Merriman)
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