Broadcom completes $69 billion acquisition of VMware in cash and stock

Broadcom has announced it has cleared all regulatory hurdles and plans to complete its $69 billion acquisition of VMware.

The company announced it planned to move ahead with the deal after China joined the list of countries that had given a go-ahead for the acquisition.

Broadcom is paying $61 billion in cash and stock for VMware and taking on $8 billion of its debt, making this one of the biggest technology deals ever.

It took 18 months for Broadcom to get all the regulatory approvals, just days before the merger agreement was due to expire.

The acquisition was able to go ahead after China’s State Administration of Market Regulation said Broadcom’s commitments, submitted Monday, would reduce the impact of the merger.

The massive buyouts are occurring at a time of heightened anxiety because of turmoil on the global supply chain, war in Europe and the Middle East, and rising prices that have the potential to cool both business and consumer activity.

Broadcom’s acquisition plan earlier gained approval from Britain’s competition regulator.

The European Commission, the EU’s executive arm and top antitrust enforcer, cleared the deal after Broadcom made concessions to address its concerns about competition.

Broadcom wants to establish a stronger foothold in the cloud computing market, and VMware’s technology allows large corporations to blend public cloud access with internal company networks.

In a statement, Broadcom said it had legal greenlights 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.”

“There is no legal impediment to closing under U.S. merger regulations,” it said.

There has been a flurry of such deals after technology companies’ shares fell from stratospheric levels attained during the pandemic, making such acquisitions more affordable.

But Broadcom’s CEO, Hock Tan, has been pursuing such deals for years, building out the company with big acquisitions like Symantec for close to $11 billion in 2019, and CA Technologies for about $19 billion the year before.

“We are excited to welcome VMware to Broadcom and bring together our engineering-first, innovation-centric teams as we take another important step forward in building the world’s leading infrastructure technology company. With a shared focus on customer success, together we are well positioned to enable global enterprises to embrace private and hybrid cloud environments, making them more secure and resilient. Broadcom has a long track record of investing in the businesses we acquire to drive sustainable growth, and that will continue with VMware for the benefit of the stakeholders we serve,” said Hock Tan, President and CEO of Broadcom.

In an earnings call not long after the deal was announced, Tan described the plan to acquire VMWare as a “very unique opportunity to take our company and its business to the next level.”

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