2023-07-19 07:19:14 ET
The U.K.'s Competition and Markets Authority (CMA) has provisionally cleared Broadcom's ( NASDAQ: AVGO ) proposed acquisition of VMware ( NYSE: VMW ).
The CMA said that the Broadcom/VMware deal is valued at $69B, consisting of $61B of equity and the assumption of $8B of debt, making it the largest acquisition to be investigated by the CMA.
An independent CMA panel provisionally found that the deal would not substantially reduce competition in the supply of server hardware components in the UK.
The CMA said that the potential financial benefit to Broadcom and VMware of making rival products work less well with VMware's software would not outweigh the potential financial cost in terms of lost business.
The panel also noted that the deal is not likely to harm innovation, in particular since information about new product adaptations only needs to be shared with VMware at a stage when it is too late to be of commercial benefit to Broadcom.
"After carefully considering a broad range of evidence, we have provisionally found that this deal would not harm competition," said Richard Feasey, chair of the independent inquiry panel.
The findings are provisional, and the CMA has invited interested parties to make representations by Aug. 9 and a final report is expected by Sept. 12.
Last week, the European Commission (EC) granted conditional approval to the acquisition, following certain commitments by Broadcom.
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Broadcom's acquisition of VMware gets conditional approval in UK