Dell weighs in on the controversial merger of his former subsidiary with the chipmaking giant
Dell Technologies CEO Michael Dell has said he is "confident" the deal between Broadcom and VMware will survive its trip through regulators at home and abroad and ultimately be completed.
"Based on everything I know, which is probably a little more than most, I would say, hopefully. I'm confident it's going to happen," the Dell Technologies founder and chairman told Computing's sister title CRN last week.
As the largest personal owner of VMware, Michael Dell was the first person Broadcom CEO Hock Tan called to pitch a potential $61 billion merger, according to US Securities and Exchange filings. Michael Dell has been in the loop ever since, and stands to add $21 billion to his fortune if the deal is approved.
He said the merger will ultimately strengthen VMware's platform and multi-cloud position.
"What I heard from them and from Hock is they're going to invest heavily in the core VMware platform. Certainly, Dell Technologies has had a long partnership with VMware even before the combination with EMC, and that will continue. And VMware continues to be a vital part of the multi-cloud ecosystem," Dell said.
"VMware has great capabilities. I think you'll see Broadcom invest in those to continue to grow it."
Dell bought the virtualisation company when it purchased EMC for $67 billion in 2015. It then spun out VMware at the end of 2021.
Gary McConnell, CEO of VMware partner VirtuIT, said that since the proposed merger was announced business has been great, and he expected it to continue that way.
"Regardless of the deal, VMware seems to have great leadership that we're in constant communication with," McConnell told CRN. "Although we'd expect it go through, VMware has a bright future regardless of which umbrella it falls under, in our opinion."
Since the deal was unveiled 10 months ago, chipmaker Broadcom has consistently said it had expected an acquisition of this size to take time to pass regulatory hurdles around the world, setting an expected closing date of 31st October.
"We are making progress with our various regulatory filings around the world, having received legal merger clearance in Australia, Brazil, South Africa and Canada," Broadcom said in a statement.
"We continue to expect the transaction will close in Broadcom's fiscal year 2023. The combination of Broadcom and VMware is about enabling enterprises to accelerate innovation and expand choice by addressing their most complex technology challenges in this multi-cloud era, and we are confident that regulators will see this when they conclude their inquiry."
Germany, France, Austria, Denmark, Italy, New Zealand and the UK also have granted foreign investment control clearance.
However, the UK joined the European Union and the US Federal Trade Commission (FTC) last month in saying it too would carry out an in-depth investigation of how the merger may harm competition.
In mid-February, VMware and Broadcom opted to extend the outside date, the point at which either side can opt out and walk away from the deal. The two agreed to move that deadline from February to May.
That came after the European Commission had said in December it would carry out an in-depth investigation of the deal, with executive vice president Margrethe Vestager adding that the agency is concerned that Broadcom may cut off access to VMware for competitors.
Also looming for Broadcom is a decision on the deal by the FTC. The agency is eight months into a "second request" investigation.
Broadcom previously has tangled with the European Commission and the FTC. Prior to unveiling its plan to acquire VMware, both agencies had dinged Broadcom for illegal sales practices in offering incentives to customers in exchange for cutting inventory from Broadcom competitors.
That practice earned Broadcom a seven-year settlement agreement with the European Commission, during which time investigators can comb through the company's sales contracts to ensure it isn't engaging in anti-competitive behaviour.
This article was first published on CRN.
