European Union (EU) antitrust regulators have given their approval for U.S. chipmaker Broadcom’s massive $61 billion acquisition of cloud computing company VMware. This deal marks Broadcom’s ambitious endeavor to diversify its business into the realm of enterprise software.
As part of the regulatory approval process, Broadcom has made substantial commitments to address competition concerns and ensure a level playing field for rivals such as Marvell Technology. The focus of these commitments lies in Broadcom’s Fibre Channel Host-Bus Adapters (FC HBAs), and they include offering interoperability assurances to Marvell and other competitors.
The commitments put forth by Broadcom guarantee access to interoperability Application Programming Interfaces (APIs), materials, tools, and technical support essential for the development and certification of third-party FC HBAs. This move aims to foster a competitive environment where multiple companies can create and innovate upon the technology.
Moreover, Broadcom has taken a significant step towards transparency and fair competition by granting competitors an irrevocable open-source license. This license ensures that the source code for all of Broadcom’s existing and future FC HBA drivers will be accessible to its rivals. By allowing competitors to examine and utilize the source code, Broadcom aims to establish a level playing field and encourage healthy competition in the market.
EU antitrust chief Margrethe Vestager emphasized that the commitments made by Broadcom provide Marvell and prospective competitors with equal opportunities. These assurances seek to address any potential concerns related to anti-competitive practices and maintain a competitive landscape within the industry.
While the EU has granted approval, the acquisition is still subject to scrutiny by regulatory bodies outside of Europe. The U.S. Federal Trade Commission (FTC) and the United Kingdom’s competition agency are currently examining the deal and evaluating its potential impact on the market. Their assessments will determine whether the acquisition can proceed without running afoul of competition regulations in their respective jurisdictions.
Broadcom’s acquisition of VMware represents a major strategic move for the chipmaker, as it seeks to expand its operations beyond its core business into the lucrative enterprise software domain. By diversifying its portfolio, Broadcom aims to position itself as a comprehensive provider of both hardware and software solutions, enabling it to better serve the evolving needs of its customers and adapt to industry trends.