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Broadcom seeks EU early approval for $61 billion VMware acquisition
according to people familiar with the matter, US chip maker Broadcom will apply for EU antitrust regulators early approval to spend 610 million yuan on the grounds that it faces competition from Amazon, Microsoft and Google. Buying cloud computing company VMware for $100 million.
The deal, announced in May this year, is also the world's second-largest M&A deal this year, marking Broadcom's efforts to diversify into enterprise software.
Tech deals have faced scrutiny from regulators around the world amid fears that the entire tech industry is highly dominated by a few big companies that could shut down startups outright when they buy them.
"The deal will create more competition in the cloud computing market, which has some very large players right now. They don't have to go to phase two at all," said one of the people, referring to the four-month European Union Phase II long-term investigation.
"The European Commission will only move to the second stage of the review if there are real competition issues, such as horizontal, vertical, foreclosure risks. I think we can show that those risks do not exist in this case," the person said.
Broadcom has yet to apply to the EU for approval of the deal.
"We are still moving forward with the acquisition, filing regulatory filings around the world, and the current progress is in line with expectations," the company said.
The European Commission said in its review of Dell's 2016 acquisition of data storage company EMC, which totaled $67 billion, that EMC's VMware had a strong position but had no ability or incentive to keep rivals out.
"Over the past five years, there has been a rapid increase in the competitive pressure on VMware from competitors that we didn't consider," said another person familiar with the matter, referring to Amazon, Microsoft and Google, the top three companies in the cloud computing industry. big provider.
"This should be the first fact-based investigation," the person said, referring to the EU's preliminary merger review.
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