Broadcom-VMware Deal Inches Closer In China: Report

Broadcom is in discussions to have behavioral remedies put in place by China’s State Administration for Market Regulation, according to Dealreporter. European Union regulators also approved the deal with conditions, while the U.S. has allowed the statutory waiting period to lapse, Broadcom has said.

Broadcom’s VMware acquisition is getting closer to approval in China as state regulators have paused a review of the $61 billion deal to discuss how to move it forward, according to a report from Dealreporter.

The publication stated that Broadcom is in discussions with authorities to have behavioral remedies put in place by China’s State Administration for Market Regulation. That is similar to what happened with regulators in the European Union.

Broadcom and VMware stocks were both up less than one percentage point each in trading Wednesday.

In a statement, Broadcom said it expects to close the $61 billion deal on Oct. 30. The deal has been approved in Australia, Brazil, Canada, Israel, Japan, South Africa, Taiwan, and the UK. Additionally, Broadcom said the statutory waiting periods in the U.S. have expired. The FTC has told CRN it has no comment.

[RELATED: Broadcom-VMware Deal Approval Comes Amid VMware Partner Renaissance]

“We are making progress with our various regulatory filings around the world,” the company said.

Additionally, the merger received foreign investment control clearance in all jurisdictions.

While the merger has been a focus of VMware partners, one partner told CRN on Wednesday that they would like to know more about how the company will be structured once the deal is complete and who will lead it.

“They’ve been doing a good job engaging with the channel in the field. We love what they’re doing, but we still don’t know what is going to happen after the deal is in the books,” the partner said.

VMware CEO Raghu Raghuram spoke with CRN last month, but would not say whether he intends to remain at the company once the deal is complete. Since the May 26, 2022 announcement that Broadcom had entered an agreement to buy VMware, Broadcom CEO Hock Tan has said the company plans to embrace the channel.

While Broadcom has committed to investing $2 billion in research and development, and to not raising prices, one partner said the proof will come after the deal closes.

“I think a lot of us are just waiting to see what happens,” they said.

Tan has been visible at VMware events attending VMware Explore in 2022 and 2023, presenting the value of combining the two companies as a win for the customers. Even as critics have pointed to how Broadcom handled its acquisition of Symantec Enterprise Security, cutting off customers below a certain dollar amount. This time, Tan has said, it will be different.

“Following the transaction’s close, we’re going to focus on making VMware’s products better for all of our customers, including enterprise customers who want products that are even easier to use,” he wrote in November 2022. “And, to be clear, we intend to continue serving customers of all sizes. VMware has a robust partner ecosystem that we will build upon to help us serve even the smallest companies. In short, we plan to take a “no customer left behind” approach.”

The European Commission approved the merger after spending seven months involved in a deep-dive probe that found Broadcom could “foreclose” its only rival for Fibre Channel Host-Bus Adapters (FC HBAs), chipmaker Marvell, had the deal been allowed to proceed.

“The commitments offered by Broadcom will enable its only rival, Marvell, to continue competing on equal footing and ensure a similar protection for any future entrants,” Margrethe Vestager, executive vice president in charge of competition policy for the European Commission, wrote in July.

Broadcom agreed to give competitors access to the source code for all of its current and future FC HBA drivers.

In addition, it will give rivals access to interoperability APIs necessary for the competition to develop and certify third-party FC HBAs. It has promised to keep that working for rivals and to give them the same real-time access to information for 10 years.

The agreement also will be monitored by an independed trustee and come with a fast-track dispute resolution process.