Is that feasible? What are your views on this? Just checking if anyone has any information on this??
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If China doesn't approve, the deal is dead. BC can't afford to lose 1/3 of their business (contract manufacturers and buyers in China) nor to pay the fine (10% of global turnover of the combined companies). Either Hock convinces the ChiComs to play ball, or it's over. And he has to do it by Nov 26th... because if China just silently delays this without formally barring it, nobody is going to sit around and wait. Investors will sue to unlock the stock, banks will want to renegotiate at today's twice-as-high interest rates...
Chinese approval and the deal goes through or else it's off. There's no third option.
No.
If the filing thresholds are met, Chinese law prohibits closing any part of the deal prior to approval. SAMR will not allow the parties to hold separate the China portion of a deal while closing elsewhere or “park” China assets with a financial buyer with no China revenues in order to circumvent the filing obligation.
China recently increased the fines for g-n-jumping (closing before approval) tenfold to about $700,000 for cases that do not pose issues. For a high-profile transaction raising real competition or industrial policy concerns, the fine can now be up to 10% of the acquirer’s global turnover in the previous year. In addition, SAMR can, in theory, order the parties to unwind the transaction and/or revert to the status quo prior to the transaction, although that power has only been used once in China’s merger review history, and that was done in a domestic combination.
Hock Tan is an "all or nothing" kind of person. Compromise isn't in his playbook, and that is why this fiasco will continue until he runs out of options to force the deal to close.
AFAIK BC makes 1/3 of their revenue in China. They can either lose that revenue and proceed with the deal or cancel the deal. The question is, do you think VMware can make up for that loss? ;)
No
We cannot discard that possibility. It wouldn’t be Broadcom selling the business, but VMWare itself or they simply could close the entity.
Broadcom doesn’t have to make deals with China. Any way, businesses always reflect the costs on the customers. China is blocking the deal that should not really matter for them on the opposite, they would benefit a lot. Countries should support businesses that wants to work there.
Nope. China would impose huge fines on Broadcom's global business.
He can try.
Yeah, 99% that's what will happen