China Can Intervene in Broadcom-VMware Association

China can interfere with the upcoming association of Broadcom and VMware in response to the latest export restrictions imposed on it by Washington. The Broadcom semiconductor giant is preparing to complete the VMware purchase for $69 billion on October 30 after passing a number of regulatory obstacles, including verification by the EU and British antimonopoly organs. However, there were reports that Beijing could refuse to approve the transaction.

The State Administration for the Regulation of the China Market (SAMR) has not yet given its consent to the upcoming transaction. According to data from the Financial Times, in light of recently declared restrictions on the sale of advanced technologies to China, the approval of the transaction will probably be postponed.

Earlier this year, there were similar reports that Beijing deliberately slows down the process of merging mergers with the participation of American companies in response to existing sanctions and export restrictions. Broadcom receives billions of income from the Chinese market, which makes any participation in its merger the subject of antimonopoly consideration.

The planned association of Intel and the Israeli manufacturer of Tower Semiconductor chips in the amount of $5.4 billion did not take place since SAMR did not give the necessary approval on time.

Nevertheless, Broadcom CEO Hawk Tan rejected the assumption of possible intervention by China in the planned acquisition during a telephone conference following the results of the 3rd quarter, saying that the transaction received the approval of all necessary instances.

According to FT, the South Korean Fair Trade Commission has not yet approved the merger, but the decision is expected next week. It is also reported that mergers involving American companies now require “additional consultations” with the China Foreign Ministry and the State Council, giving the process a political character.

A representative of VMware said, “We continue to expect the closure of the transaction on October 30, 2023.” Broadcom has not yet commented on the situation.

There is an opinion that the upcoming acquisition may