China relents: Broadcom-VMware merger approved at last
Final boss legal level cleared as SAMR says yes ...
Broadcom’s troubled acquisition of virtualization juggernaut VMware has cleared the final regulatory hurdle and will close as soon as tomorrow after China gave the transaction the green light.
VMware announced today the $69 billion purchase is proceeding with just days to go before the merger agreement between the two companies was set to expire on November 26.
Broadcom has now received legal merger clearance in multiple countries including the European Union and the UK, and foreign investment control clearance in all necessary jurisdictions, according to VMware.
There is no legal impediment to closing under US merger regulations, it added, a presumed reference to Broadcom's previous statement that pre-merger waiting periods under the Hart-Scott-Rodino Act had expired, and as no objections were raised by the Federal Trade Commission (FTC), there was nothing in US law to prevent the sale going ahead.
VMware said the two companies therefore “intend to close Broadcom’s acquisition of VMware on November 22, 2023.”
The cliffhanger was over Beijing’s approval of the deal. China's State Administration for Market Regulation (SAMR) had remained resolutely silent on whether it would give its consent for the transaction to proceed, or whether it would sabotage the merger in retaliation for US export restrictions and sanctions that have been imposed on Chinese companies.
The approval has come just days after China’s President Xi Jinping met US President Biden at the Asia-Pacific Economic Cooperation (APEC) summit, a meeting which reportedly went well.
Broadcom was required to seek approval from China’s regulatory authorities because it generates billions in revenue from its business in the country.
However, Broadcom CEO Hock Tan was equally adamant that Beijing would not derail the merger, stating as much on the company’s Q3 earnings call in September.
The two companies had earlier said they expected to close the transaction before October 30, the end of Broadcom’s fiscal year 2023.
- Fears China could trash Broadcom's VMware nuptials as revenge for sanctions
- VMware staff reportedly told job cuts may start before Broadcom acquisition
- Broadcom, VMware insist merger to 'close soon' as China plays hard to get
- VMware revealed Symantec SASE integration plan before Broadcom finished buying it
Both companies are obviously in favor of the takeover, but some customers and employees are less happy with the move. There is a worry about price hikes for VMware customers following the merger, with analyst Forrester this month claiming that up to 20 percent of enterprise customers intend to ditch the virtualization giant next year.
A VMware spokesperson told us at the time that it continues "to see our multi-cloud strategy resonate strongly with our customers who remain committed to our technology portfolio," and said it had an "open enquiry to discuss the validity of the commentary offered" in Forrester's post.
Shaking some in the workforce is persistent rumors of layoffs, something that is sadly not uncommon after one large corporation assimilates another. ®