Broadcom Inc.’s proposed $61 billion takeover of cloud-computing company VMware Inc. will get an in-depth review from the U.K.’s antitrust agency after the firm did not offer any remedies to allay the body’s competition concerns.
The Competition and Markets Authority set a deadline of Sept. 12 to make its decision over whether to block the deal or wave it through. The agency usually only considers structural remedies, which include selling parts off, in the first stage of its merger investigations.
It was an expected move after the CMA previously found that the deal could possibly increase costs for customers including banks and telecommunication firms, plus dent innovation unless acceptable solutions are forthcoming. Any deal would cause competition issues in the supply of hardware components, the CMA said.
Broadcom’s acquisition is already under scrutiny from European regulators and is also in the midst of an in-depth review in Brussels.
Broadcom makes a wide range of electronics, with its products going into everything from Apple Inc.’s iPhones to industrial equipment, while VMware makes virtual software that allows users to access systems remotely. The companies don’t have overlapping products but are often used together to manage data centers.
“The combination of Broadcom and VMware is about enabling enterprises to accelerate innovation and expand choice by addressing their most complex technology challenges in this multi-cloud era, and we are confident that regulators will see this when they conclude their inquiry,” a Broadcom spokesperson said.