July 17, 2023

European Commission approves proposed merger of two US-based tech companies

Following an in-depth investigation, the European Commission has approved the proposed acquisition of VMware, a US based software company, by Broadcom, a US based hardware company that offers hardware components used to connect servers to storage or network, including Fibre Channel Host-Bus Adapters (“FC HBAs”), storage adapters and Network Interface Cards (“NICs”).  The Commission found that the acquisition could harm competition in the worldwide market for the supply of FC HBAs, and thus approved the proposed transaction conditioned upon Broadcom’s full compliance with access and interoperability commitments made to potential market entrants and to Marvell Technologies, Inc., its only rival in the market for the supply of FC HBAs.  Broadcom also agreed to implement an organizational separation between the team working on Broadcom’s FC HBAs and the team that provides third-party certification and technical support and also committed to protect the confidential information of Marvell and any potential entrant in the context of the interoperability and certification processes.

Based on discussions with Marvell and other server manufacturers, which are the primary customers of FC HBAs, the Commission confirmed that the suggested remedies would be effective if fully implemented.  The Commission’s conditional approval requires Broadcom’s commitments to remain in place for a period of 10 years, and Broadcom’s compliance with these commitments will be monitored by an independent trustee under the supervision of the Commission.  A fast-track dispute resolution mechanism was also established to resolve any potential disagreements between the parties and further ensure the effective implementation of the commitments.

European Commission press release