Broadcom Completes $69B VMware Takeover Deal After China Approves

Broadcom Inc. finally closed its acquisition of VMware Inc. after 18 months of wait marred with various regulatory issues. The American semiconductor manufacturing company revealed on Wednesday, Nov. 22, that it completed its $69 billion takeover deal with the cloud-computing technology company headquartered in Palo Alto, California.

Broadcom said it was able to close the deal with VMware after receiving regulatory approval from China. The negotiations were first revealed in May 2022 and the company said at that time that the move is part of the company’s CEO’s efforts to uplift their software business.

The Struggle for Regulatory Approvals

As per Reuters, the semiconductor firm faced difficulties in securing approvals from regulators and companies around the world. This was the main reason why the acquisition had been delayed for a long time and missing three closing dates in the previous months.

The European Commission (EU) gave the nod for the deal after Broadcom proposed solutions to help a rival, Marvell Technology. For the UK's Competition and Markets Authority (CMA), it greenlighted the acquisition after a thorough review.

On the other hand, it took a while for China to hand its approval due to ongoing tension with the U.S. over tighter export control measures for semiconductors. An analyst at AJ Bell, Danni Hewson commented that the improved mood after US President Biden and China’s President Xi Jinping held a meeting helped settle the transaction.

VMware’s Position After the Takeover of Broadcom

Now that the acquisition is complete, VMware is expected to become the focal point of Broadcom’s leader’s software operations. The cloud-computing firm founded in 1998 will also be used for the company’s business diversification plans.

"We are excited to welcome VMware to Broadcom and bring together our engineering-first, innovation-centric teams as we take another important step forward in building the world's leading infrastructure technology company,” Broadcom’s president and chief executive officer, Hock Tan, said in a press release. “With a shared focus on customer success, together we are well positioned to enable global enterprises to embrace private and hybrid cloud environments, making them more secure and resilient."

Tan added, "Broadcom has a long track record of investing in the businesses we acquire to drive sustainable growth, and that will continue with VMware for the benefit of the stakeholders we serve."

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