Reuters reports EU approval of Broadcom’s VMware buy imminent

Reuters reported today that U.S. chip maker Broadcom is set to gain conditional EU antitrust approval for its proposed US$61 billion acquisition of VMware.

According to the article, the European Commission’s clearance is tied to Broadcom’s interoperability remedies to rivals to address competition concerns, sources said. Reuters went on to say that “the EU antitrust watchdog is scheduled to decide on the deal by July 17, and Broadcom declined to comment.

“One of the remedies focuses on Fibre Channel Host-Bus Adapters (FC HBAs) and is targeted at rival Marvell Technology, one of the people said. Marvell Technology did not respond to a request for comment.

“FC HBAs are storage adapters that connect servers to storage located outside the server on a storage-area network using the fibre channel protocol, typically through a switch. Broadcom is a leading supplier of FC HBAs.”

Last month, the website Silverlinings posted an article indicating that Gartner consultants were sticking by a prediction made in December that the majority of VMware customers would be well advised to “identify exit ramps for deployed VMware products including identifying alternative solutions, migration plans, costs, risks and timetables.”

Those suggestions were contained in a Quick Answer note written by Gartner analysts Andrew Lerner, Michael Warrilow and Dennis Smith, in which the three stated that “Broadcom’s proposed acquisition of VMware has been a topic of interest and concern to many IT leaders.

“Since the acquisition was announced, Gartner has received (and continues to receive) numerous inquiries from VMware customers who are worried about the potential for dramatic pricing increases, the elimination of, or reduced investment in some VMware products and a reduction in overall customer experiences, including support and channel.”

They point out in the document that customer concerns stem primarily from “Broadcom’s actions associated with prior acquisitions of CA Technologies and Symantec, in which numerous customers complained about dramatic cost increases during renewals, with very limited flexibility for negotiations.”

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Paul Barker
Paul Barker
Paul Barker is the founder of PBC Communications, an independent writing firm that specializes in freelance journalism. He has extensive experience as a reporter, feature writer and editor and has been covering technology-related issues for more than 30 years.

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