The company, based in San Jose, California, 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.
The announcement came soon after Microsoft acquired video
game-maker Activision Blizzard for $69 billion, also one of the most expensive
tech acquisitions in history.
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.
Countless businesses and public bodies, including major
banks, big retailers, telecom operators and government departments, rely on
Broadcom gear and VMware software. 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. VMware, which is based in
Palo Alto, California, has close relations with every major cloud company and
provider, including Amazon, Google and Microsoft.
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.
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.”