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69 billion dollars and one country that can change everything.
China may block the upcoming merger of Broadcom and VMware in response to the latest export restrictions imposed on it by Washington. Semiconductor giant Broadcom is preparing to complete its $69 billion purchase of VMware on October 30 after passing a series of regulatory hurdles, including a review by the EU and British antitrust authorities. However, there have been reports that Beijing may refuse to approve the deal.
The State Administration for Market Regulation of China (SAMR) has not yet given its consent to the upcoming transaction. According to the Financial Times, in light of recently announced restrictions on the sale of advanced technology to China, approval of the deal is likely to be delayed.
Earlier this year, there were similar reports that Beijing was deliberately slowing down the approval process for mergers involving American companies in response to existing sanctions and export restrictions. Broadcom receives billions of dollars in revenue from the Chinese market, which makes any involvement in the merger subject to antitrust review.
The planned $5.4 billion merger between Intel and Israeli chipmaker Tower Semiconductor failed to take place, as SAMR did not give the necessary approval on time.
However, Broadcom CEO Hock Tan dismissed suggestions of possible Chinese interference in the planned acquisition during a Q3 earnings conference call, saying the deal had received approval from all relevant authorities.
According to the FT, the South Korean Fair Trade Commission has not yet approved the merger, but a decision is expected next week. It is also reported that approval of mergers involving American companies now requires "additional consultations" with the Chinese Ministry of Foreign Affairs and the State Council, which gives the process a political character.
A VMware spokesperson said:"We continue to expect the transaction to close on October 30, 2023." Broadcom has not yet commented on the situation.
The upcoming acquisition is expected to be a success for Broadcom, VMware, their customers, and the industry as a whole, given the key role of the VMware cloud and virtualization platform in many companies ' IT infrastructure.
VMware's leadership is confident in the success of the deal, as announced at the company's Explore conference in August. The event also announced a $2 billion investment in VMware, of which $1 billion will go to R & D.
However, there are rumors about a possible increase in prices for VMware licenses after the merger, which Tan was forced to deny in a blog post. Layoffs are also expected after the deal is finalized, and some VMware employees are rumored to be offered a new contract from Broadcom or a short-term contract as part of the transition plan.
China may block the upcoming merger of Broadcom and VMware in response to the latest export restrictions imposed on it by Washington. Semiconductor giant Broadcom is preparing to complete its $69 billion purchase of VMware on October 30 after passing a series of regulatory hurdles, including a review by the EU and British antitrust authorities. However, there have been reports that Beijing may refuse to approve the deal.
The State Administration for Market Regulation of China (SAMR) has not yet given its consent to the upcoming transaction. According to the Financial Times, in light of recently announced restrictions on the sale of advanced technology to China, approval of the deal is likely to be delayed.
Earlier this year, there were similar reports that Beijing was deliberately slowing down the approval process for mergers involving American companies in response to existing sanctions and export restrictions. Broadcom receives billions of dollars in revenue from the Chinese market, which makes any involvement in the merger subject to antitrust review.
The planned $5.4 billion merger between Intel and Israeli chipmaker Tower Semiconductor failed to take place, as SAMR did not give the necessary approval on time.
However, Broadcom CEO Hock Tan dismissed suggestions of possible Chinese interference in the planned acquisition during a Q3 earnings conference call, saying the deal had received approval from all relevant authorities.
According to the FT, the South Korean Fair Trade Commission has not yet approved the merger, but a decision is expected next week. It is also reported that approval of mergers involving American companies now requires "additional consultations" with the Chinese Ministry of Foreign Affairs and the State Council, which gives the process a political character.
A VMware spokesperson said:"We continue to expect the transaction to close on October 30, 2023." Broadcom has not yet commented on the situation.
The upcoming acquisition is expected to be a success for Broadcom, VMware, their customers, and the industry as a whole, given the key role of the VMware cloud and virtualization platform in many companies ' IT infrastructure.
VMware's leadership is confident in the success of the deal, as announced at the company's Explore conference in August. The event also announced a $2 billion investment in VMware, of which $1 billion will go to R & D.
However, there are rumors about a possible increase in prices for VMware licenses after the merger, which Tan was forced to deny in a blog post. Layoffs are also expected after the deal is finalized, and some VMware employees are rumored to be offered a new contract from Broadcom or a short-term contract as part of the transition plan.
