The European Commission Sends Broadcom Statement of Objections Over Proposed Acquisition of VMware

On April 12, 2023, the European Commission (“the Commission”) published on its official website the press release (“Press Release”) regarding the Statement of Objections Sent to Broadcom Regarding the Acquisition of VMware.

The European Commission has expressed its preliminary opinion to Broadcom regarding its proposed acquisition of VMware, stating that it may impede competition in the market for certain hardware components that work together with VMware's virtualisation software.

Broadcom produces hardware, including Network Interface Cards (NICs), Fibre Channel Host-Bus Adapters (FC HBAs), and storage adapters, while VMware is the leading global provider of server virtualisation software that is interoperable with a variety of hardware, including FC HBAs and storage adapters.

The Commission launched an in-depth investigation in December 2022 to determine if Broadcom's acquisition of VMware might restrict competition in the supply of NICs, FC HBAs, and storage adapters, as well as its concerns that Broadcom may hinder the development of SmartNICs by other providers and begin bundling VMware's virtualisation software with its software, no longer offering VMware's virtualisation software as a standalone product.

After conducting the in-depth investigation, the Commission is concerned that Broadcom may restrict competition in the global markets for the supply of FC HBAs and storage adapters by impeding access to VMware's server virtualisation software for competitors' hardware, causing delays or degradation.

The full text of the Press Release is available here.

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