Broadcom's $69 Billion VMware Deal Set For Lengthy EU Antitrust Investigation

Broadcom's $69bn acquisition of cloud software company VMware is set for a lengthy antitrust investigation in Brussels over regulatory concerns that the deal will harm competition across the global technology industry. From a report: Broadcom is already in preliminary discussions with EU officials who will be looking into worries that the merger may lead to abusive behaviour, including potential future price rises by the US chipmaker, three people with direct knowledge of the transaction said. Many large acquisitions receive similar interrogation, known in EU circles as a "phase 1" investigation, which typically takes a few months to complete. But those close to the situation suggest that EU authorities plan to push forward with a more detailed "phase 2" investigation, which could take well over a year and may ultimately derail the deal altogether. Nvidia eventually walked away from a proposed $66bn purchase of chip designer Arm after being subject to a lengthy EU antitrust probe.

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[nightflameauto]

It's not just greed that allowed this to happen though. It was greed AND stupidity. Or at least short-sightedness. We've been programmed my MBAs to seek profits now and cut costs now. Look to the next quarter's profits, at absolute most, and don't worry about next year, two years, ten years from now. It took that precise combination to convince management that it's a terrific idea to save a very, very few pennies now by moving everything off-prem, and it'll all be awesome and lovely and never ever go down.

U

More Paywalled News Links

[NoWayNoShapeNoForm]

Financial Times article is completely paywalled.

In other news, I suspect just about any company that wanted to buy VMware would be investigated by the EU under the possible future crisis that prices of products from that purchaser might rise.

smh

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[Ritz_Just_Ritz]

In Broadcom's case, there will be no shortage of enterprise software customers who lived through their digestion of CA to report on the rass aping VMWare customers can expect on licensing and support costs along with poor customer support once the deal is closed. Can't wait to see those fireworks.

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[Anonymous Coward]

This seems to be the same article as wherever Slashdot copied the summary from:

https://arstechnica.com/tech-p... [arstechnica.com]

Followed by a rubber stamp

[rsilvergun]

once the right palms are greased. The only time Europe does anything with anti-trust is when it's a national security issue, like with ARM. Even then it's kind of iffy.

Seriously, stop voting for pro-corporate right wing politicians. Let go of social issues (civil rights aren't a social issue, BTW). All these mergers are costing you jobs and money. Every time one happens they fire 10-20% of the staff (which you're not competing with in the job market) and raise prices to pay back the loans they took out

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[cheekyboy]

Exactly, common Broadcom, cant you compete on merit talent alone?
Cant you make your own vSphere and cloud network. Do what IBM does with opensource stuff, value ad tools on top.
It would cost only $500m to hire the staff that you need to compete. Or is starting from 0 clients just ummm, too hard like the old
days when you were a startup? Is going 10 years with zero profits too long ?

Gee I wish I had $60 billion to 'hmm what shall I invest in to double my $ in 4 years?'

Why not make 1000 startups at $20m each.

Subscription only needs to be stopped / looked at

[Joe_Dragon]

Subscription only needs to be stopped / looked at

Kind of goofy

[smoot123]

Until last December, VMware was mostly owned by Dell. The EU accepted that. I don't recall anyone suggesting VMware/Dell was not in customer's interest. In December, Dell divests VMware and there was much rejoicing.

What I wonder is if Dell were to be the buyer, rewinding the clock to last November, how would the EU react? Dell has a lot more influence than Broadcom does, at least in data centers.

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[Junta]

Adding to that, Dell+VMware is in practice more dicey anti-competitive wise (risk of vmware shops being forced onto Dell hardware would be a cause for concern). While Broadcom could pull a little of that (force them to only support Broadcom storage controllers and network), they have less of a stack of interest than Dell.

I could however see a concern that, in practice, the private equity acquisition engine that is now Broadcom has a track record of acquiring and starving products of R&D spending. So vm

Anticompetitive? How?

[sabbede]

There'd probably be an anticompetitive angle if it was Microsoft buying VMWare, but Broadcom? How the f-k is a chipmaker in competition with VMWare? Besides "not at all, not even in the slightest, tiniest way", of course.