VMWare Stock Drops. Its Purchase by Broadcom Could Face a Delay in China: Report

In May 2022, infrastructure-software company Broadcom (ticker: AVGO) announced a deal to buy VMware for $61 billion in cash and stock, plus the assumption of $8 billion of net VMware debt. The deal is slated to close on Oct. 30. 

However, China’s State Administration of Market Regulation is likely to delay signing off on the deal and there will likely be additional consultations with Chinese government authorities, the Financial Times reported Thursday, citing people familiar with the matter. 

Any potential delay comes after the U.S. further tightened restrictions on exports of advanced semiconductor technology to China this week.

Representatives for Broadcom and VMware didn’t immediately respond to requests for comment. The companies said they still expected to close the deal on its original schedule, according to the Financial Times.

In filings this week related to the acquisition, Broadcom and VMware said the deal could be affected by its ability to secure regulatory approvals on the terms expected and in a timely manner.

Earlier this year, Intel (INTC) dropped its planned $5.4 billion acquisition of Israel’s 
Tower Semiconductor
 (TSEM) following delays in getting Chinese approval. A merger triggers an antitrust review in China if two companies in a deal have annual revenue of more than $117 million from the country.

Write to Adam Clark at [email protected]