The Financial Times reported on Thursday that Beijing is considering delaying US chipmaker Broadcom Inc’s (AVGO.O) $69 billion acquisition of cloud computing company VMware Inc (VMW.N).
The article also cited persons familiar with the situation as saying that China’s State Administration of Market Regulation has not approved the sale and is likely to postpone doing so now that US President Joe Biden’s administration has instituted stricter chip regulations.
VMWare or Broadcom did not immediately answer requests for comment from Reuters. SAMR in China could not be reached for comment right away.
According to the article, which cited two people involved in the discussions, China’s merger and acquisition licenses for US corporations now need further meetings with the Ministry of Foreign Affairs and the State Council.
In May 2022, Broadcom announced that it would purchase VMware for $61 billion in stock and the remaining amount in debt. This was the chipmaker’s biggest and most audacious attempt to enter the enterprise software market.
The American chip manufacturer had stated that the deal was still expected to conclude within the current fiscal year.
According to the company’s announcement in July, Broadcom has obtained foreign investment control permission in all required countries and legal merger clearance in Taiwan, South Africa, Australia, Brazil, Canada, the European Union, and South Africa.
The UK’s Competition and Markets Authority (CMA) previously looked into the arrangement, and after conducting a thorough examination, the deal was authorized.
Additionally, the chipmaker obtained EU antitrust approval of the agreement this year after providing remedies to assist competitor Marvell Technology (MRVL.O), allowing the businesses to compete on an equal footing.
China has closely monitored deals involving chipmakers. Intel Corp (INTC.O) canceled its $5.4 billion bid to acquire Israeli contract chipmaker Tower Semiconductor Ltd (TSEM.TA) when their merger agreement expired without receiving regulatory permission from China.
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