admin
Shares in
Broadcom
and
VMware
were rising despite an apparent delay to the closing of their merger agreement, which was set to complete on Monday. China could be a problem—but investors don’t seem too worried.
Broadcom
(ticker: AVGO) stock gained 1.6% in premarket trading on Monday, outperforming futures tracking both the
S&P 500
and
Nasdaq
indexes, while
VMware
(VMW) shares advanced 1.3%.
Chip maker Broadcom’s $75 billion acquisition of cloud computing group VMware was expected to close on Monday, but a vague press release from the companies disclosed what seems to be a delay.
“Broadcom and VMware today announced their expectation that Broadcom’s acquisition of VMware will close soon, but in any event prior to the expiration of their merger agreement,” the groups said in a statement early Monday.
A VMware spokesperson told Barron’s last week that the deal was on track for Monday, but saying the deal will close “soon” may contradict that. The issue may be China, where regulators have yet to sign off on the deal and recent U.S.-China tensions over technology put the merger in the spotlight. But investors still seem upbeat, and the companies say there is no American legal barrier to the deal being done.
“The parties have received legal merger clearance in Australia, Brazil, Canada, the European Union, Israel, Japan, South Africa, South Korea, Taiwan, the United Kingdom, and foreign investment control clearance in all necessary jurisdictions,” the companies said in a statement. “There is no legal impediment to closing under U.S. merger regulations.”
Write to Jack Denton at [email protected]
Read the full article here
