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Charlotte Trueman
Senior Writer

China clears Broadcom’s $69B VMware acquisition, allowing deal to close

Nov 21, 20232 mins
Mergers and AcquisitionsServer VirtualizationTechnology Industry

Five days before the two companies’ merger agreement was due to expire, the deal has passed its final regulatory hurdle.

broadcom sign
Credit: Shutterstock

China has cleared Broadcom's $69 billion acquisition of VMware, leaving the two companies free to close the transaction on November 22.

Although the deal faced scrutiny from a number of competition regulators across the globe, including in the UK and the EU, the acquisition was ultimately approved by all the necessary jurisdictions ahead of the merger agreement's expiration date on November 26.

Broadcom was required to seek approval from China's regulatory authorities because it generates billions in revenue from its business in the country. Approval came days after US President Joe Biden met with President of China, Xi Jingping.

Concerns were originally raised by the UK's Competition and Market's Authority (CMA) that the deal could harm the ability of Broadcom's rivals to compete with VMware's server virtualization software, and if there would be a potential financial benefit to Broadcom and VMware if they were to make rival products work less well with VMware's software.

However, it was ultimately concluded that the concerns were unfounded and the deal would not substantially reduce competition in the supply of server hardware components in the UK, a conclusion that was also reached by the EU Commission. In addition, Broadcom offered a commitment to interoperability by pledging to provide Marvell -- a rival in Fibre Channel host bus adapters -- with API access to VMware's virtualization products.

"Broadcom 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," VMware wrote in a press release on Tuesday. "There is no legal impediment to closing under US merger regulations."

Charlotte Trueman
Senior Writer

Charlotte Trueman is a staff writer at Computerworld. She joined IDG in 2016 after graduating with a degree in English and American Literature from the University of Kent. Trueman covers collaboration, focusing on videoconferencing, productivity software, future of work and issues around diversity and inclusion in the tech sector.

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