Broadcom’s pending acquisition of VMware was hit with another hurdle this week as the United Kingdom’s Competition and Markets Authority (CMA) regulator initiated an advanced review phase on the deal. That move comes a week after the same regulator expressed competitive concerns over the pending mega-acquisition on the data center virtualization market.

The CMA in a statement released on Wednesday noted it was moving the review of the acquisition to a “phase 2 investigation.” The move came after Broadcom informed the CMA that it would not be providing any “undertakings” following the completion of the initial review process.

The newly instigated investigation does have a Sept. 12 deadline, which would still allow Broadcom to follow through on CEO and President Hock Tan’s past claims that the deal would close during Broadcom’s 2023 fiscal year, which ends Oct. 31. However, that would also require CMA approval as well as other pending government inquiries, including the Federal Trade Commission (FTC) in the United States.

Broadcom’s management has been touting approval for the deal from various government agencies from around the world. Tan stated during the vendor’s latest earnings call that these include legal merger clearance in Brazil, South Africa, and Canada, and foreign investment control clearance in Germany, France, Austria, Denmark, Italy, and New Zealand.

The deal is valued at $61 billion in cash and stock, with Broadcom also assuming $8 billion in VMware debt, pushing the deal’s total value to $69 billion. VMware shareholders have already approved the deal, however Broadcom does have a $1.5 billion termination fee should the deal fall apart.

Some have noted the recent CMA push could dampen chances of the deal gaining required consent.

The CMA last week released results of its “phase 1 investigation” that highlighted concerns over Broadcom’s growing data center software market control if it were to acquire VMware. It cited VMware’s “leading position in server virtualization software and that compatibility with its software is critical for the server hardware components sold by Broadcom and its rivals.”

“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,” CMA Executive Director David Stewart wrote.

Analysts have been sour on the proposed deal, with many concerned Broadcom’s traditional heavy hand post-acquisitions could stymie VMware’s innovation.

“For acquired companies, a Broadcom acquisition sparks fear of price hikes, diminished support, and stunted innovation,” Forrester Senior Analyst Tracy Woo bluntly stated in a report. “At a time when VMware customers need to re-establish confidence in the company’s strategy and innovation plans after beloved ex-CEO Pat Gelsinger’s departure, this would be a notable departure from that course.”

Both Broadcom and VMware have attempted to counter these perceived notions.

Tan late last year put out a blog post attempting to alleviate concerns about the deal. He noted that in recent visits to Broadcom customers, multicloud, cloud-native applications, and pricing have been the three topics “top of mind for customers as it relates to the VMware-Broadcom transaction.”

“Ultimately, what I’ve stressed to them has been straightforward: our customers are and will remain the most important part of our business,” Tan wrote.

VMware has been more subdued.

The vendor has lost several high-profile executives in light of the pending deal. However, it has stated its employee base remains “very engaged.”

Purnima Padmanabhan, who was recently named to replace Ajay Patel as GM and SVP of VMware Modern Apps and Management, told SDxCentral that those employees are helping the vendor do “what we can do to win.”

Padmanabhan, who headed up cloud management before the promotion, said she expected to face a good deal of cultural differences in her new role – even though “this was a smaller change compared to the constant Broadcom conversation that employees have,” she said. “But net-net, when you start anchoring conversations based on the customer, and the customer needs, and what we can do to win, I’ve been incredibly pleasantly surprised by how teams have gone so fast.”