Quiver Quantitative - Broadcom (NASDAQ:AVGO) is poised to finalize its acquisition of VMWare on Wednesday, concluding a massive $69 billion deal that ranks among the largest in the tech sector. The transaction has successfully navigated through a complex global regulatory landscape, with China granting its approval under stringent conditions, a significant hurdle given heightened geopolitical tensions.
The strategic acquisition by Broadcom, a semiconductor behemoth, promises to expand its reach into the cloud computing arena via VMWare's robust server software offerings. However, Chinese regulatory stipulations mandate that VMWare's products remain compatible with local hardware and do not impede customers' access to Broadcom's array of hardware solutions, including essential storage adapters.
Despite investor apprehensions heightened by recent U.S.-China export control disputes that threatened to derail the deal, all necessary regulatory consents have now been secured. This green light dispels last month's concerns that the escalating tensions could obstruct the deal's completion.
Yet, the market response has been tepid, with Broadcom's and VMWare's stocks witnessing a downturn, largely attributed to the arbitrage trades surrounding the deal's impending closure. This hesitance reflects the intricate financial maneuvers often accompanying such significant acquisitions.
This article was originally published on Quiver Quantitative