Broadcom has successfully concluded its $61 billion acquisition of VMware after undergoing thorough scrutiny from regulators, as stated in a press release. Following China’s recent approval with added restrictions, the network chip manufacturer has now obtained all necessary clearances.
The company announced, “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.” Expressing excitement, Company welcomed VMware into its fold, aiming to unite their engineering-focused, innovation-driven teams.
While the Broadcom/VMware deal may not have garnered the attention of other major tech acquisitions, such as Microsoft and Activision, it holds significant importance. Company, based in San Jose, plays a pivotal role in shaping the internet infrastructure, with its products widely used in data centers, cloud providers, and network infrastructure. On the other hand, VMware specializes in virtualization and cloud computing software, facilitating secure connections between local networks and public cloud access for corporations.
Broadcom and VMware navigate final hurdle as Chinese regulators set conditions for $69B megadeal
This strategic alignment made VMware an appealing target for Broadcom, but it also subjected the acquisition to regulatory scrutiny in various regions. The European Commission, for instance, raised concerns about potential competition issues, fearing Broadcom could limit interoperability and access to VMware’s software. However, Broadcom secured EU approval by providing access to key network fiber optic components to its main rival, Marvell. The EU also dismissed concerns about VMware bundling and emphasized that Broadcom would still face competition in the storage adapter and NIC markets.
Amidst worries about US-China tensions affecting the deal, especially with new export rules announced by the Biden administration in October, approval in the Chinese market was confirmed. China imposed conditions on Broadcom, requiring interoperability of VMware’s server software with rival hardware as part of the approval.