After a lengthy investigation, the UK is also attacking the EU. Broadcom now just has to convince China to agree to take over VMware.

The Competition and Markets Authority (CMA) announced Monday that it has approved Broadcom’s acquisition of VMware for $61 billion. The UK is closely following the European Union, which gave its consent a month ago.

Broadcom received preliminary approval in late July after undergoing a Phase 1 study earlier this year. The CMA feared that the acquisition of VMware would impede Broadcom’s ability to compete in manufacturing competing networking products.

Now an independent panel has completed a phase 2 study. It shows that Broadcom has no incentive to withhold technology from competing brands. It would lose too much money as a result that it is unlikely to actually happen.

The CMA also investigated whether sharing sensitive secrets with Broadcom’s competitors puts them at a disadvantage because of their VMware compatibility. The panel concludes that this will not be the case. Such critical information is disclosed at a later date, making it too late for Broadcom to derive any commercial benefit from it.

The CMA’s final conclusion is that the acquisition will not significantly reduce competition. The panel therefore gives its approval.

The Great Wall of China

Globally, the UK, EU, Australia, Brazil, Canada, Israel, South Africa and Taiwan have given their approval. The US Federal Trade Commission (FTC) would like to review the agreement, but the deadline to do so has officially passed. Broadcom can therefore complete the takeover there without any legal problems.

The only country yet to agree to a global deal is China. That’s where the shoe pinches, because every American acquisition that involves technology is held back by China. Last week, Intel threw in the towel after failing to complete its $5.4 billion acquisition of Tower Semiconductor.

The State Administration for Market Regulation (SAMR) in China requires that the products are also available nationwide with every purchase. This would not be possible in the case of Broadcom under current US export regulations. It also doesn’t help that US President Joe Biden issued an executive order earlier this month to bar US companies from investing in Chinese technology.

With Broadcom generating billions of dollars in revenue in China, an antitrust investigation is insurmountable. There is a good chance that China will remain stiff, which will not ease tensions with the US. Let’s wait and see what will be decided in the next few weeks or months. Broadcom’s fiscal year ends October 31. Hock Tan, CEO of Broadcom, has done it many times