Broadcom faces EU warning over $61 bln VMware deal

STORY: U.S. chipmaker Broadcom could face a European snag over its $61 billion deal to buy cloud computing firm VMware.

Reuters sources say it’s set to face an EU warning over the deal.

The EU opened a probe into the proposal back in December, saying the takeover could restrict competition in the market for some hardware components.

Brussels watchdogs, which are due to give their verdict by early June, declined to comment on Monday’s (February 27) reports.

But tech M&A deals have attracted growing scrutiny on both sides of the Atlantic.

Regulators are worried that big firms could stifle competition by acquiring smaller, more innovative rivals.

Now the sources say the European Commission will set out its concerns in a so-called “statement of objections”.

The deal is also under investigation in the UK, but has been approved in Brazil, South Africa and elsewhere.

Broadcom says it will continue to work with watchdogs.

It says the existence of Amazon, Microsoft and Google shows there is strong competition in the cloud computing market.