Broadcom-VMWare Deal To Be Finalised After Nod From China Regulator: Report
Semiconductor major Broadcom has revealed its intention to finalise the $69 billion acquisition of Cloud computing firm VMWare.
Semiconductor major Broadcom has revealed its intention to finalise the $69 billion acquisition of Cloud computing firm VMWare, concluding one of the largest takeover transactions in the technology sector, which underwent thorough global regulatory scrutiny. The chipmaker confirmed the receipt of all regulatory approvals, including China's recent approval with added restrictive conditions, says a report by news agency Reuters.
The deal was previously expected to close by November 26.
The successful clearance of regulatory needs paves the way for the conclusion of this strategic deal. This development is being seen as a positive step for US-based Broadcom, allowing the company to leverage VMware's expertise and presence in the software industry.
Some investors in the firms had feared about the outcome of the deal after reports said last month that increasing tensions between China-US could lead China's regulator to scrap the deal.
VMWare server software should work with local hardware and the deal should not restrict customers from purchasing and using Broadcom's hardware products such as storage adapters, the report added, quoting Chinese regulator as saying in a statement.
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It is to be noted that tensions between Beijing and Washington had mounted after the Joe Biden administration introduced tougher controls on exports of high-end chips to China earlier in October. Broadcom shares were down more than 1 per cent, while VMware was down 4.6 per cent. Brokerage Bernstein attributed the share moves to some technical impacts from arbitrage trades around the deal, the Reuters report added.
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