{"id":7074,"date":"2023-10-30T11:54:34","date_gmt":"2023-10-30T11:54:34","guid":{"rendered":"https:\/\/infundpros.com\/business\/broadcom-vmware-merger-held-up-as-china-delays-69bn-deal\/"},"modified":"2023-10-30T11:54:34","modified_gmt":"2023-10-30T11:54:34","slug":"broadcom-vmware-merger-held-up-as-china-delays-69bn-deal","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=7074","title":{"rendered":"Broadcom-VMware merger held up as China delays $69bn 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=eb940813-4e98-4046-8800-77692db963ea\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>US chipmaker Broadcom and cloud software company VMware have delayed the completion of their $69bn merger, which had been scheduled to close on Monday, as they await approval from China. <\/p>\n<p>The companies said in a joint statement that they maintained their \u201cexpectation that Broadcom\u2019s acquisition of VMware will close soon, but in any event prior to the expiration of their merger agreement\u201d, which set a final deadline of November 26. <\/p>\n<p>The Financial Times reported this month that Chinese regulators were considering holding up the deal, which was first announced in May 2022, after Washington toughened rules to block Chinese access to high-performance semiconductors. <\/p>\n<p>Broadcom and VMware\u2019s statement did not mention China directly but said they expected to \u201cclose [the] transaction promptly following satisfaction of [a] remaining condition\u201d. China was not listed among the territories that have approved the deal, which include the EU, Japan, South Korea and the UK. <\/p>\n<p>People close to the situation in China have said geopolitical friction between Washington and Beijing hung over the deal\u2019s approval. <\/p>\n<p>The companies said that there was \u201cno legal impediment to closing under US merger regulations\u201d. <\/p>\n<p>The statement indicates that US antitrust authorities had not lodged objections before the deadline expired for intervention under the Hart-Scott-Rodino Act, which requires large deals to be notified to the US Federal Trade Commission and Department of Justice. <\/p>\n<p>Ahead of Monday\u2019s deadline, both companies had proceeded as if closing was imminent. <\/p>\n<p>Mark Kelly, chief executive of MKP Advisors, an advisory firm, said Monday\u2019s statement was the \u201cfirst public admission by the companies that they cannot close as planned\u201d, despite the FT\u2019s initial report that a lack of approval from China could delay it. <\/p>\n<p>\u201cNever before has there been such uncertainty over the fate of such a large acquisition so close to a supposed deadline for it to be closing,\u201d Kelly said. <\/p>\n<p>\u201cI\u2019ve never seen anything like this,\u201d said one hedge fund investor who owns VMware shares.\u00a0\u00a0\u00a0\u00a0<\/p>\n<p>The delay will leave investors hoping that a thaw in US-China relations could open a path to approval. President Xi Jinping is expected to meet his counterpart Joe Biden in San Francisco next month for the Asia-Pacific Economic Cooperation summit. Prior meetings, such as one held in Bali last year, have helped stabilise relations.\u00a0<\/p>\n<p>China\u2019s State Administration for Market Regulation did not immediately respond to requests for comment, outside normal business hours. <\/p>\n<p>Moving forward without China\u2019s approval could be highly damaging for Broadcom. The San Jose-headquartered group brings in about a third of its revenue from shipments to China and lawyers say the group could face a large fine for closing without China\u2019s sign-off.\u00a0<\/p>\n<p>If Broadcom\u2019s merger with VMware is eventually scuppered by Beijing, it would mark the second time in five years that the technology group has seen its 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. Broadcom subsequently relocated its headquarters to the US.<\/p>\n<p><em>Additional reporting by Ding Wenjie in Beijing<\/em><\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/eb940813-4e98-4046-8800-77692db963ea\" 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. US chipmaker&#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-7074","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>Broadcom-VMware merger held up as China delays $69bn 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.US chipmaker Broadcom and cloud\" \/>\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=7074\" \/>\n<meta property=\"og:locale\" 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