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Broadcom announced its intentionto corrupt VMwarefor $ 61 billion in May 2022 . After clearing a act of regulative vault , include the U.S. , UK and European Union , it announced in August that the dealwould close today . But this morningthe company indicatedthat there was one more obstruction , with news report indicate that Chinese regulators areholding up the mint .
One complication here is that the deal has an going engagement of November 26 , at which time the deal would expire , and Broadcom would have to pay a $ 1.5 billion termination fee under the term of the agreement .
The company seems convinced that it can do that . “ Broadcom Inc. and VMware , Inc. today announced their expectation that Broadcom ’s acquisition of VMware will close shortly , but in any event prior to the exit of their uniting agreement , ” the company said in a command .
That does n’t tell us much about the reason for the hold up or why they are confident , and the company would not comment further , pointing to the closet release when asked for illumination by TechCrunch .
While the program line did n’t name China directly , it state that there was “ one stay obstacle . ”The Financial Times reportedthat China is reviewing the deal . With so little time get out before the termination deadline , they could kill the lot but by slow - walk the determination until the deadline passes .
Ray Wang , founder and main analyst at Constellation Research , says there is definitely a political element here between the U.S. and China . “ The kicker is China ’s approval . They are moderate it up as a tit for cheapness [ for U.S. AI chip exportation controls ] , ” Wang told TechCrunch . Earlier this month the Biden administrationannounced new controlson the export of Nvidia AI chips to China , as a recent lesson .
If the deal were to go through , VMware , the virtualization hulk , would become part of Broadcom , a chip manufacturer . It feels like a fairly unusual spousal relationship , even in compounding with some other legacy software companies Broadcom acquire in late years .
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Aswe wroteat the meter of the slew announcement :
It spend over$18 billion in 2018to steal legacy initiative software company CA Technologies andanother $ 11 billion a yr laterfor Symantec ’s legacy security business organisation . Those are very different animals from VMware , which is still a feasible company and not some dinosaur with a portfolio of licensing deals on the books that a company like Broadcom can take advantage of .
For now , the deal hinges on that final approval , and even though the company vocalise confident it will close , it definitely is thin out it very near .
