China has given regulatory approval to Broadcom’s acquisition of VMware, which is now expected to close tomorrow. China was the final global regulator that needed to approve the merger in order for it to go forward, and Broadcom is moving quickly now that all approvals are in place.
In a brief public statement, Broadcom said that it plans to close the merger on Nov. 22 and has “received legal merger clearance in Australia, Brazil, Canada, China, the European Union, Israel, Japan, South Africa, South Korea, Taiwan, the United Kingdom, and foreign investment control clearance in all necessary jurisdictions. There is no legal impediment to closing under U.S. merger regulations.”
Some observers had feared that the merger might be scuttled due to increasing geopolitical tensions between the U.S. and China, including recently announced tightening on semiconductor exports by the United States government.
Broadcom’s president and CEO Hock Tan offered his thoughts on the transaction in a blog post entitled “What a combined Broadcom and VMware can deliver to our customers.”
Broadcom is best known for its semiconductors, but the company already has an enterprise software group, mostly accreted through past acquisitions, that brought in more than $7 billion in revenue in 2021. VMware’s annual revenue — $11.8 billion for 2021 — dwarfs that, however. Broadcom plans to rename its software group VMware with the conclusion of the acquisition, which it expects to complete by the end of next year.
“Three topics are top of mind for customers as it relates to the VMware-Broadcom transaction: multi-cloud, cloud-native apps and pricing,” said Tan in the blog post.
The European Union approved the deal in July, with some caveats on continued interoperability of VMware’s solutions with chips from other companies. The State Administration for Market Regulation (SAMR) in China also placed conditions on the deal ensuring continued interoperability and competition, saying in a statement that the merger might otherwise “have the effect of eliminating or restricting competition in the global and Chinese non-public cloud virtualization software, fiber channel adapters, storage adapters and Ethernet network card markets.”