Broadcom, VMware May Push Merger Deadline Past Thanksgiving On $61B Deal

Broadcom and VMware have agreed that if the deal hasn’t closed by August 26, they may set a new outside date of November 26, 2023, pushing the merger weeks past Broadcom’s end of fiscal year, when CEO Hock Tan originally projected it would be completed.

Broadcom and VMware have agreed to push the “outside date” — the date the two companies could walk away from the $61 billion merger — to as far out as November in a bid to gather enough time to appease global regulators.

The deal, announced in May 2022 shows no sign of closing anytime soon as the two companies have once again pushed back the deadline to complete their long-awaited merger. On Friday, they agreed that if the deal isn’t done by August 26 this year, either side can extend the close-by date to November 26, the Sunday after Thanksgiving, according to a U.S. Securities and Exchange filing.

“If the consummation of the Transactions does not occur on or before August 26, 2023 and if on such date all of the closing conditions except those relating to regulatory approvals have been satisfied or waived, either Broadcom or VMware may further extend the Outside Date to November 26, 2023, by providing written notice to the other party five business days prior to August 26, 2023,” VMware wrote in an 8-K filed with the SEC near the close of business on Friday.

A Broadcom spokesperson did not immediately reply to a request for comment.

It is the second time the two sides have moved the outside date back. In February, the two agreed to push the date to May 26. The filing Friday lands seven days before that deadline, and comes as regulators in Europe and the UK show no signs of clearing the merger.

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That is the second time the sides have pushed back the “outside date” but it is also weeks after Broadcom’s fiscal year ends. When Broadcom CEO Hock Tan announced the merger on May 26, he said it would close in this fiscal year, which ends Oct. 31.

If a deal is not completed by this date, and if both sides agree, they could walk away, ending the transaction.

While Broadcom announced that the transaction had passed in Canada, Canadian regulators told CRN they have up to one year, post close, to challenge any completed mergers and warned it could take “appropriate action.”

“As the Bureau is required by law to conduct its merger reviews confidentially, I am unable to comment further,” Yves Chartrand, spokesman for Canada’s Competition’s Bureau told CRN. “Should we determine that the proposed transaction is likely to harm competition, we will take appropriate action. “

Meanwhile the European Commission, the competition watchdog for the European Union, is also sounding the alarm on the merger following a monthslong investigation that began in December and included a look at Broadcom’s internal documents.

On April 12, the commission said it feared Broadcom could use the newly acquired technology from VMware to turn off competitors’ access to it, which may “in turn lead to higher prices, lower quality and less innovation for business customers and ultimately consumers.”

“The Commission is concerned that Broadcom may restrict competition in the global markets for the supply of FC HBAs and storage adapters by foreclosing competitors’ hardware by delaying or degrading their access to VMware’s server virtualization software,” the commission wrote in an April 4 filing.

Meanwhile in the U.S., the Federal Trade Commission told CRN it is still not commenting on what is now a 10-month-long in-depth investigation of the acquisition.

Broadcom has repeatedly said it expects a merger the size of the one it has proposed with VMware could take longer to close. When it announced the sale on May 26, 2022, Broadcom said it expected to close within this fiscal year, which ends in October.

The deal has cleared regulators in Brazil and South Africa, but it is still awaiting clearance in China.