Broadcom has ended a months-long saga and closed its $69 billion deal to acquire VMware after finally being granted regulatory approval in China.
The deal closed on November 22 after first being announced in May 2022, having faced delays due to global scrutiny on the basis of regulations, pushing back the date on three separate occasions.
The happy ending comes after many expressed concerns that US-China tensions could get in the way of chipmaker Broadcom’s acquisition of cloud computing firm VMware, both headquartered in California.
China permits VMware sale to Broadcom
Confirmation from China came through on November 22, just days before the deal’s November 26 deadline.
AJ Bell’s head of financial analysis, Danni Hewson, said that the fairly positive meeting between China's President Xi Jinping and US President Joe Biden earlier this month might have “settle[d] remaining nerves” (via Reuters).
Hock Tan, Broadcom’s President and CEO, said, "We are excited to welcome VMware to Broadcom and bring together our engineering-first, innovation-centric teams as we take another important step forward in building the world's leading infrastructure technology company.”
Broadcom says that the deal will “enable enterprise customers to create and modernize their private and hybrid cloud environments.”
China’s decision to grant regulatory permission was awarded on the basis that the merger would not abuse its market position, demanding that it would allow interoperability between VMware’s servers and other third-party hardware providers.
Tech companies have been under intensifying scrutiny in recent months over an assortment of anticompetitive practices, so it’s in Broadcom’s best interest to adhere to China’s request not just in China, but globally, or else it could face some pretty hefty fines.
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