Broadcom can brave China’s sword of Damocles

VMware

31/10/2023 16:06

(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.)
    By Jonathan Guilford
       NEW YORK, Oct 31 (Reuters Breakingviews) - The chipmaker
expects to seal its strategically shaky VMware deal as Beijing’s
blessing pends amid escalating geopolitical tension. In 17
months of waiting, however, its rising shares have lifted the
purchase price by 16%, to $80 bln. Boss Hock Tan is better off
taking the blade.
    Full view will be published shortly.
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    CONTEXT NEWS
    Chipmaker Broadcom said on Oct. 30 that it expects to close
its acquisition of VMware before the deal’s merger agreement
expires on Nov. 26. The only remaining impediment is regulatory
clearance from China.
    China’s State Administration for Market Regulation, which
reviews mergers, is likely to delay approving the transaction
amid worsening relations between Beijing and the U.S.
administration, the Financial Times reported on Oct. 19. 
    Other deals have been terminated following delays in
receiving approval from SAMR, including Intel’s $5.4 billion
acquisition of Tower Semiconductor and DuPont De Nemours’ $5.2
billion purchase of Rogers. 

 (Editing by Jeffrey Goldfarb and Sharon Lam)
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