{"id":3077,"date":"2023-10-19T07:38:19","date_gmt":"2023-10-19T07:38:19","guid":{"rendered":"https:\/\/infundpros.com\/business\/beijing-weighs-delaying-approval-of-69bn-broadcom-vmware-deal\/"},"modified":"2023-10-19T07:38:19","modified_gmt":"2023-10-19T07:38:19","slug":"beijing-weighs-delaying-approval-of-69bn-broadcom-vmware-deal","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=3077","title":{"rendered":"Beijing weighs delaying approval of $69bn Broadcom-VMware deal"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=b23d2a9f-d873-43e4-9032-632d4e9d438c\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Beijing is weighing holding up US chipmaker Broadcom\u2019s $69bn acquisition of cloud software company VMware \u2014 a move that would come soon after Washington toughened rules to block Chinese access to high-performance semiconductors.<\/p>\n<p>China\u2019s State Administration of Market Regulation has not signed off on the blockbuster deal announced in May 2022 and is likely to delay approving the transaction, especially in the wake of Washington\u2019s tougher chip controls unveiled on Tuesday, said three people familiar with the matter.<\/p>\n<p>Two of the people said China\u2019s merger and acquisition approvals for US companies now required additional consultations with the Ministry of Foreign Affairs and the State Council.<\/p>\n<p>\u201cTheir involvement adds to the political nature of the process,\u201d one of the people said.<\/p>\n<p>The State Administration of Market Regulation, the Ministry of Foreign Affairs and the State Council did not respond to requests for comment.<\/p>\n<p>Broadcom said it had received regulatory approvals in nine jurisdictions and was making progress with filings around the world. The group said it expected the transaction to close in its fiscal year ending this month. VMware said: \u201cWe continue to expect the deal to close on October 30 2023.\u201d<\/p>\n<p>South Korea\u2019s Fair Trade Commission is one other regulator yet to approve the deal. An FTC spokesperson said a review was held on Wednesday, and a decision was likely to come next week.<\/p>\n<p>The need to go through China\u2019s deal review process puts the semiconductor group in the middle of rising tensions between Washington and Beijing.<\/p>\n<p>Chinese state security officials raided the offices of US consultancies such as Bain &amp; Company and Mintz Group this year. Authorities have also banned some purchases of chips from US semiconductor maker Micron Technology.<\/p>\n<p>If Broadcom\u2019s merger with VMware is scuppered by Beijing, it would mark the second time in five years that the technology group has seen its dealmaking ambitions curtailed by US-China tensions.<\/p>\n<p>In 2018, then-US president Donald Trump blocked Broadcom\u2019s $142bn bid for chipmaker Qualcomm, citing national security concerns about a US semiconductor champion being bought by what was then a Singapore-headquartered company.<\/p>\n<p>Broadcom subsequently relocated its headquarters to the US.<\/p>\n<p>Chinese officials have been closely scrutinising any transaction involving US chip groups. Semiconductor giant Intel in August called off its $5.4bn acquisition of Israeli chipmaker Tower Semiconductor, after failing to secure regulatory approval in China ahead of a self-imposed deadline for closing the transaction.<\/p>\n<p>\u201cChina\u2019s antitrust regulator rarely formally blocks mergers, especially if other major jurisdictions have already approved it,\u201d said a Chinese antitrust expert who asked not to be named.<\/p>\n<p>\u201cIf authorities do not want to approve a transaction, they prefer to extend the review process repeatedly until the parties lose patience and give up.\u201d<\/p>\n<p>San Jose-based Broadcom has repeatedly declined to address whether its purchase of VMware would need the sign-off of antitrust authorities in China. However, deals between large multinationals in which the two participants generate revenue in China of more than Rmb400mn ($55mn) must be filed with the State Administration of Market Regulation for anti-monopoly approval.<\/p>\n<p>In Broadcom\u2019s most recent financial year, about a third of the company\u2019s $33bn in revenue came from shipments to China. VMware does not break out its China revenue, but executives have said its business in the country is \u201crobust\u201d.<\/p>\n<p><em>Additional reporting by Tim Bradshaw in London and Nian Liu in Beijing<\/em><\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/b23d2a9f-d873-43e4-9032-632d4e9d438c\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Beijing is&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-3077","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Beijing weighs delaying approval of $69bn Broadcom-VMware deal | inFundPros<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Beijing is weighing holding up\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=3077\" \/>\n<meta property=\"og:locale\" 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