Highlight: "Markets in Review" Issue #1

Broadcom, VMWare Transaction

On Wednesday, November 22nd, VMware, a Silicon Valley company, was finally approved to be absorbed by Broadcom for $69billion. This will give Broadcom the capacity to seamlessly get a hand on the virtualization and cloud computing markets, something that they have not prioritized yet. Just like we saw in the Activision Blizzard deal with Microsoft, which went through several regulatory hurdles around the world; Broadcom had to jump through a similar number of obstacles, but the only one that remained was the approval of China’s foreign ministry. Surprisingly, China changed their stance after Xi Jinping’s recent visit to the US at the APEC Summit in San Francisco, California. It seems that soft diplomacy is now an M&A tool, during this period of drought in the IPO market, and the volatility of the global macro-environment. The ongoing ‘Silent Chip War’ between the US and China, is getting resolved, but at what cost? The deal now entails significant oversight from the Chinese government over this company, something that was not particularly appreciated by either side of the aisle in the US… as we saw in the Byte dance hearings, the company behind the TikTok trending app. This is signalling to the global market, that the source of growth of the M&A market might reside in China, provided that diplomatic channels remain open. For a more in-depth perspective on this matter, check out this Financial Times article review.

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