The EU is concerned about possible monopolies in the $61 billion deal. In addition, chip giant Broadcom announced in May that it was acquiring VMware, best known for its hypervisor software.
The deal was worth around $61 billion, making it one of the most significant acquisitions ever. So naturally, it was expected that various regulators would want to take a closer look at the acquisition.
The European Commission has now announced that it is launching an in-depth investigation. Commissioner Margrethe Vestager, in charge, says she is concerned about the possible impact on the market. This mainly concerns the interoperability of VMware’s virtualization software.
It is in many servers and has to work neatly with the chips in those servers. So if Broadcom decides to favour its semiconductors, there may be a problem, Vestager said.
It is not the first time that VMware has been part of a hardware company. For a long time, the virtualization specialist was a subsidiary of Dell, which acquired it through a takeover of the larger EMC. But Dell allowed VMware to operate independently to appeal to a broader customer portfolio.
Broadcom initially seems to have stricter plans for the company and would even like to rebrand itself as VMware.