VMW - VMware falls amid UK block of Activision/Microsoft deal

2023-04-26 09:28:31 ET

VMware Inc. ( NYSE: VMW ), which agreed to a $61 billion sale to Broadcom ( NASDAQ: AVGO ) last year, dropped 2.5% in premarket trading after the UK's antitrust authority blocked Microsoft's ( MSFT ) planned $69 billion acquisition of Activision ( ATVI ).

VMware ( VMW ) is likely falling in sympathy after the UK blocked the Activision ( ATVI ) videogame megadeal as its sale to Broadcom ( AVGO ) is also being reviewed by the UK antitrust regulator, as well as U.S. and Europe's antitrust authority.

Late last month the UK's Competition and Markets Authority moved its review of VMware/Broadcom moved into a Phase 2, or an in-depth investigation, with the deadline set for September 12, for the agency to decide on the deal.

The VMware ( VMW ) sale to Broadcom has seen increased regulatory scrutiny in recent months, with Europe's antitrust regulator issuing a "statement of objections" over the proposed deal earlier this month. The deal received a "second request" from the FTC in late July.

A week ago a UBS analyst said VMware's ( VMW ) stock could fall to $115 if its was scuttled due to regulatory issues, up from an earlier estimate of $100.

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