© Reuters. FILE PHOTO: A smartphone with a displayed Broadcom logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration

LONDON (Reuters) – Britain’s competition regulator said on Wednesday it was considering whether to refer US chipmaker Broadcom (NASDAQ:)’s $61 billion acquisition of VMware (NYSE:) for an in-depth probe after finding the deal could harm competition.

The Competition and Markets Authority (CMA) said the deal could make computer servers more expensive for British businesses.

“Servers are a vital building block, functioning largely thanks to hardware products made by firms like Broadcom, working in unison with virtualisation software from firms like VMware,” said CMA Executive Director David Stewart.

“We are concerned this deal could allow Broadcom to cut out competitors from the supply of hardware components to the server market and lead to less innovation at a time when most firms want fast, responsive, and affordable IT systems.”

The regulator said Broadcom now had five days to offer legally binding proposals to address its concerns, after which it would decide within a further five days whether to refer the deal to an in-depth investigation.

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