Broadcom-VMware Deal Under Pressure In US, EU: Five Things To Know
The $61 billion mash-up now faces the same regulatory crucible that shredded the hopes of NVIDIA’s $40 billion deal with Arm.
Federal Trade Commission Taking Close Look At The Deal
The FTC stated in a September 2021 memo that it would widen “second request” merger investigations for larger deals, with the director of the Bureau of Competition, Holly Vedova, writing that she intended to bring “ heightened scrutiny to a broader range of relevant market realities,” calling it “core to the agency’s mission.”
Broadcom and VMware were notified that the FTC would undertake a “second request” look at the deal in July, a review process that halts a transaction until the review is complete, according to Broadcom’s Securities and Exchange Commission filings.
“The parties may not complete the transactions until they substantially comply with the second request and observe a second 30-calendar-day waiting period, unless the waiting period is terminated earlier, or the parties commit not to close for some additional period of time,” Broadcom wrote in an SEC filing it posted last week.
Following a second review, the FTC can either allow the deal to proceed, impose conditions on the companies, or attempt to block the deal entirely by suing in federal court.
The FTC has not responded to CRN’s request for comment on the status of its investigation.