VMware (ticker: VMW) experienced a significant decline in its stock value as concerns surrounding its acquisition by Broadcom intensified. In recent trading, VMware shares fell by 7.6% to $153.64, adding to previous losses prompted by apprehensions regarding the impact of U.S.-China trade tensions on the deal's completion.
In May 2022, infrastructure-software company Broadcom (ticker: AVGO) announced its plans to acquire VMware for $61 billion in cash and stock, along with the assumption of $8 billion of net VMware debt. The deal is set to close on October 30.
Neither Broadcom nor VMware have provided immediate comments regarding these developments. Nevertheless, both companies stated that they still anticipate closing the deal as scheduled, according to the Financial Times.
In recent filings related to the acquisition, Broadcom and VMware acknowledged that regulatory approvals may impact the deal's progress according to the expected terms and timeline.
It is worth noting that earlier this year, Intel (INTC) had to abandon its proposed $5.4 billion acquisition of Israel’s Tower Semiconductor (TSEM) due to delays in obtaining Chinese approval. In China, mergers trigger antitrust reviews if the involved companies generate annual revenue of over $117 million from the country.