Broadcom Successfully Closes $69 Billion VMware Deal 


On Wednesday, Broadcom (NASDAQ:AVGO) finalized its $69 billion acquisition of cloud-computing giant VMware (NYSE:VMW) following regulatory approval in China, the last major market awaiting clearance. The completion of this deal, announced in May 2022, represents a significant move by Broadcom CEO Hock Tan to strengthen the chipmaker’s software business.

The transaction encountered considerable regulatory scrutiny globally, leading to three delays in the closing date. The approval from China’s regulatory authorities on Tuesday was a crucial milestone, especially given the heightened tensions between the U.S. and China concerning stricter chip export control measures. Concerns had arisen among investors about the deal’s feasibility before the November 26 deadline.

“The improved mood music after the meeting between China’s President Xi Jinping and U.S. President Joe Biden earlier this month helped to settle remaining nerves,” commented Danni Hewson, Head of Financial Analysis at AJ Bell, after Broadcom and VMware announced their intention to close the transaction on November 22.

The European Commission had previously approved the acquisition, with Broadcom providing remedies to address concerns related to rival Marvell Technology (NASDAQ:MRVL). In the UK, the Competition and Markets Authority (CMA) gave its approval following an in-depth investigation.

While the completion of the Broadcom-VMware deal is a positive development, market strategist Cabot Henderson at JonesTrading noted that the regulatory landscape for major tech mergers remains uncertain. Big Tech deals, including Microsoft’s (NASDAQ:MSFT) now-closed $69 billion acquisition of Activision, have faced increased scrutiny from the U.S. Federal Trade Commission under Chair Lina Khan.

Broadcom’s successful acquisition of VMware underscores the complex regulatory environment surrounding large-scale tech mergers and the importance of navigating global approvals to secure such transformative transactions.

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