The U.S.'s Federal Trade Commission is the last major Western regulator that needs to give its approval. However, there may be concerns surrounding China's decision. In recent weeks, Chinese regulators failed to approve Intel's planned acquisition of Tower Semiconductor, causing apprehension about clearance for the Broadcom deal. Mergers trigger an antitrust review in China if the companies involved earn over $117 million in annual revenue from within the country. Considering Broadcom's substantial revenue from China, obtaining clearance may prove challenging.
While China's antitrust review process has raised concerns about potential roadblocks, it is important to note that there is no reason to assume that the same outcome will occur in the Broadcom case. Moreover, this deal differs from most semiconductor industry mergers, as it involves a significant expansion outside of the industry. Furthermore, China has previously approved large-scale mergers involving U.S. companies, such as Microsoft's acquisition of Activision, indicating a willingness to support such deals.
Broadcom anticipates receiving final regulatory approvals, including from the FTC, by October 30. The company remains committed to working constructively with regulators in other jurisdictions and is currently in the advanced stages of obtaining the remaining required regulatory approvals.
Broadcom shares experienced a 0.2% increase in premarket trading, while VMware shares surged by 6.6%.