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Software and semiconductor maker Broadcom and its acquisition target VMware have agreed to give themselves another 90 days to complete the $61 billion acquisition they announced on May 26, 2022.
A regulatory filing by enterprise cloud vendor VMware showed that both the companies had delivered a mutual notice to extend the final date of the merger to twelve months from the day the deal was announced.
“Together with VMware, we have agreed to extend the Outside Date in our merger agreement to May 26, 2023, which is common for a transaction of this size. We are continuing to make progress with regulatory authorities around the world,” a Broadcom spokesperson said.
The companies’ initial merger agreement set a deadline (the “outside date”) of February 26, 2023, for consummation of the deal, with a total of three extensions of three months each allowed at either company’s request.
Broadcom expects to close the deal by Oct. 30, 2023, the end of its fiscal year, the spokesperson said, without offering any other reason for the extension.
The delays could be due to clearances from anti-trust and competition watchdogs of the US, UK and the European Union, including the US Federal Trade Commission, media reports have speculated. VMware shareholders already voted to accept the deal in November 2022.
Shortly after the deal was announced, VMware customers had raised concerns, citing Broadcom’s less than stellar track record with prior acquisitions such as that of CA Technologies in 2018 and Symantec in 2019.
With the prior acquisitions, Broadcom had raised prices while decreasing support and stopping investment in innovation, according to Tracy Woo, senior analyst at Forrester. Broadcom and VMware have since tried to reassure customers.
On the other hand, some experts argue that it makes sense for Broadcom to buy VMware, and that the company has the potential to develop enterprise and telco technologies that could broaden its appeal to users in both sectors.
