China approves Broadcom-VMWare merger, last hurdle is cleared

The long-anticipated merger between Broadcom and virtualization giant VMware has been approved by Chinese regulatory authorities, marking the end of a significant phase of uncertainty. This approval paves the way for the merger, valued at $69 billion, to be finalized as early as November 22, 2023, just before the deadline set for the merger agreement on November 26.

Broadcom, a global leader in semiconductor and infrastructure software solutions, has successfully obtained legal merger clearances in multiple countries, including the European Union and the UK. The company has also secured foreign investment control clearances in all necessary jurisdictions, indicating broad international acceptance of the deal.

In the United States, there are no legal impediments to the merger under US regulations. The Hart-Scott-Rodino Act’s pre-merger waiting periods have expired without any objections from the Federal Trade Commission (FTC), clearing the path for the transaction under US law.

The approval from China, a critical market for Broadcom’s revenue generation, comes shortly after a successful meeting between China’s President Xi Jinping and US President Biden at the Asia-Pacific Economic Cooperation (APEC) summit. This meeting seemingly contributed to a positive outcome for the deal.

Despite the corporate alignment on this acquisition, there are concerns among VMware customers and employees. Analysts, including those from Forrester, have speculated that the merger could lead to price hikes for VMware’s services. This concern has led to predictions that up to 20 per cent of VMware’s enterprise customers might leave the platform next year.

The merger between Broadcom and VMware represents a significant development in the tech industry, potentially reshaping the landscape of virtualization and cloud computing services. As the companies proceed with the final stages of the deal, the tech community and customers will closely watch the impacts of this major corporate integration.

IT World Canada Staff
IT World Canada Staff
The online resource for Canadian Information Technology professionals.

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