Broadcom closes its $61 billion megadeal with VMware
Broadcom's mega $61 billion VMware acquisition has closed following considerable scrutiny by regulators, the company announced in a press release. With China recently granting approval for the acquisition with added restrictions, the network chip manufacturer had secured all the required approvals.
"Broadcom has received legal merger clearance in Australia, Brazil, Canada, China, the European Union, Israel, Japan, South Africa, South Korea, Taiwan, the United Kingdom, and foreign investment control clearance in all necessary jurisdictions," the company said. "We are excited to welcome VMware to Broadcom and bring together our engineering-first, innovation-centric teams."
The Broadcom/VMware deal lacked the glamour of tech's other mega acquisition involving Microsoft and Activision. However, San Jose-based Broadcom's products form the structure of much of the internet, as they're widely used for data centers, cloud providers and network infrastructure. VMware, meanwhile, makes virtualization and cloud computing software that allows corporations to safely link local networks with public cloud access.
That made VMware a logical target for Broadcom, but it also placed the acquisition in the crosshairs of regulators in multiple regions. The European Commission, for one, was concerned that Broadcom could harm competition by limiting interoperability between rival hardware and VMware's server virtualization software. It also worried the company could either prevent or degrade access to VMware's software, or bundle VMware with its own hardware products.
Broadcom gained EU approval for the deal in the summer though, mainly by providing IP access and source code for key network fiber optic components to its main rival, Marvell. The EU also concluded that fears of VMware bundling were unfounded and that Broadcom would still face competition in the storage adapter and NIC markets.
There were also concerns that tensions between China and the US could scuttle the deal, after the Biden administration announced new rules in October making it harder to export high-end chips to China. However, approval in that market was announced yesterday, with conditions imposed by China on how Broadcom sells products locally. Namely, it had to ensure that VMware's server software was interoperable with rival hardware, China's regulator said in a statement.
This article originally appeared on Engadget at https://www.engadget.com/broadcom-closes-its-61-billion-megadeal-with-vmware-083915996.html?src=rss