Broadcom’s acquisition of VMware gets UK regulator’s approval
In May of the preceding year, Broadcom announced its intention to acquire VMware through a combination of cash and stock. Based on the closing price of Broadcom’s common shares on May 25, 2022, the aggregate transaction value is estimated at approximately $61 billion, with anticipated completion in 2023. Additionally, Broadcom will assume VMware’s net debt, amounting to $8 billion. Upon the deal’s culmination, Broadcom’s software division will undergo a rebranding as VMware, integrating its existing infrastructure and security software solutions as an extended component into VMware’s operational framework.
The UK’s Competition and Markets Authority (CMA) commenced an antitrust investigation into this transaction at the end of last year. As per reports from TechPowerup, approval was granted on August 21, 2023. This approval marks another judicial jurisdiction, following endorsements from the European Union, Australia, Brazil, Canada, Israel, South Africa, and Taiwan. In the United States, due to the expiration of the waiting period, there remain no legal impediments to finalizing the merger.
Broadcom conveyed its commitment to continued constructive collaboration with regulatory authorities across other jurisdictions. The company is currently navigating the advanced stages of securing essential regulatory green lights and remains confident of attaining approval by October 30, 2023. Additionally, an agreement has been reached between Broadcom and VMware to further extend the “outside date” stipulated in their transaction agreement. This extension will be elaborated upon in VMware’s 8-K filing with the U.S. Securities and Exchange Commission.
Broadcom’s acquisition of VMware represents the third-largest takeover in the global tech sector. This transaction is surpassed only by Dell’s $67 billion procurement of EMC in 2015 and Microsoft’s acquisition of gaming behemoth Activision Blizzard for $68.7 billion earlier last year. Broadcom’s valuation of VMware stands at $142.50 per share, representing a premium of 44% when juxtaposed with the closing price on May 20, when acquisition rumors first surfaced. Notably, Dell divested itself of VMware the previous year, having initially acquired it as part of the Dell-EMC transaction.