Broadcom closes $69 billion VMware deal after China approval

By Harshita Mary Varghese

(Reuters) – Broadcom on Wednesday closed its $69 billion acquisition of cloud-computing firm VMware after receiving regulatory approval in last major market China and ending a months-long saga.

The deal, one of the biggest globally when announced in May 2022, was the latest in CEO Hock Tan’s efforts to boost the chipmaker’s software business.

However, the transaction faced tough regulatory scrutiny across the world and the companies had delayed the closing date three times.

China’s regulatory approval came through on Tuesday after ongoing tensions with the U.S. around tougher chip export control measures had stoked fears among some investors on the company’s ability to close the deal before the Nov. 26 deadline.

“The improved mood music after the meeting between China’s President Xi Jinping and U.S. President Joe Biden earlier this month helped to settle remaining nerves,” Danni Hewson, head of financial analysis at AJ Bell, said on Tuesday, after the companies said they planned to close the transaction on Nov. 22.

The European Commission had approved the acquisition after Broadcom offered remedies to help rival Marvell Technology while the UK’s Competition and Markets Authority (CMA) gave its green light following an in-depth investigation.

“Perhaps we will see some boards being willing to move forward now that we have seen the (Activision Blizzard) and (VMware) get blessing, but don’t think we can count on it,” said Cabot Henderson, market strategist at JonesTrading, on Tuesday.

Big Tech mergers such as Microsoft’s now-closed $69 billion purchase of the “Call of Duty” publisher Activision have faced heightened regulatory pressure from the U.S. Federal Trade Commission under its Chair Lina Khan.

(Reporting by Harshita Mary Varghese; Editing by Sriraj Kalluvila)