Broadcom will complete the acquisition of VMware as soon as possible
Following recent indications of a potential delay in the acquisition of VMware, Broadcom has now intimated that this deal will soon come to fruition. However, juxtaposed with earlier commitments to finalize the acquisition prior to the conclusion of Broadcom’s 2023 fiscal year, it is evident that the transaction will likely experience a postponement.
At present, Broadcom’s $61 billion transaction to acquire VMware has garnered approvals from regulatory authorities in regions such as the European Union, Australia, Brazil, Canada, Israel, South Africa, South Korea, the UK, and Taiwan. Additionally, the U.S. has concluded its antitrust review waiting period, affirming that there are no legal impediments hindering this acquisition.
Nevertheless, due to the U.S. government’s recent imposition of more stringent high-tech export restrictions to China, the Chinese administration is contemplating deferring its approval of Broadcom’s acquisition of VMware. This has led many to speculate that the deal might be ensnared by the Chinese government’s considerations. A case in point is Intel’s previous $5.4 billion acquisition of Tower Semiconductor, which met with failure as it languished awaiting approval from China.
In a prior statement, Broadcom’s CEO, Hock Tan, conveyed his confidence in the successful acquisition of VMware. Similarly, VMware’s CEO, Raghu Raghuram, intimated at a recent event in Singapore that further updates could be anticipated by the end of October.
However, prevailing statements from Broadcom reiterate their intent to expedite the VMware acquisition, anticipating its completion before the close of the 2023 fiscal year. Given that we are currently at the very threshold of the end of Broadcom’s 2023 fiscal year, it’s clear that this acquisition will experience a delay. Analyzing the current market dynamics, there’s a possibility that Broadcom might contemplate divesting its operations in the Chinese market or employ alternative strategies to facilitate the transaction.
