Broadcom Completes $69 Billion Acquisition of VMware

In November 2023, Broadcom completed one of the largest deals in the technology sector with its $69 billion acquisition of VMware after extensive merger reviews by competition authorities around the world. A global Compass Lexecon team provided economic analysis and support throughout the regulatory process.

Situation

The acquisition by Broadcom of VMware was announced in May 2022. Broadcom is a global technology company active in the design, development and supply of semiconductor solutions, while VMware is a provider of multi-cloud services and virtualisation software. The transaction would be subject to approval from multiple competition authorities worldwide.

Our Role

Compass Lexecon supported Broadcom and its counsel through merger reviews in the US, EU, UK, China, and other jurisdictions globally. The focus of the merger reviews were conglomerate effects between VMware’s core software product (the vSphere hypervisor) and hardware products that Broadcom sells which may interact with it. Amongst other things, we conducted a ‘vertical arithmetic’ style analysis to test whether Broadcom would have an incentive to foreclose rivals from sales of hardware products to customers who run VMware's software on their servers.

Outcome

After 18 months of regulatory reviews, including a second request by the US FTC and Phase II investigations by the UK CMA and European Commission, Broadcom obtained all necessary clearances from competition authorities globally.