VMware and Broadcom merger update: Deadline extended by another three months

The outside date of the mammoth merger has been pushed back to late May

Chipmaker Broadcom and cloud computing group VMware have mutually agreed to extend the outside date of the pair's $61bn merger by 90 days.

The original deadline was set for February 26, 2023, however the outside date has changed to May 26, almost one year since news of the groundbreaking deal first hit the press.

The change of plans seems to have been agreed on by both sides as indicated by a SEC Filing from VMware published on Friday (February 17).

An outside date is a date where both parties have agreed in advance that if a merger has not yet completed either side can terminate the agreement and walk away from the deal free of any penalties.

The outside date is neither the forecast completion date or the expected completion date, and is not as significant and final as it may seem in deals such as this.

"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," a Broadcom spokesperson told CRN.

"We are continuing to make progress with regulatory authorities around the world, and we continue to expect the transaction to close in Broadcom's fiscal year 2023."

Could tighter scrutiny have pushed the deal back?

The takeover has been dubbed the second biggest in the channel so far this year but has faced contention across Europe, the UK and the US.

Last week European antitrust regulators announced they had resumed their investigation into the blockbuster merger.

The EU competition watchdog said it will decide by June 7 whether it will hit the brakes on the deal or give it the greenlight.

In December the European Commission opened an "in depth" investigation of Broadcom's $61bn acquisition of VMware, citing concerns that Broadcom could turn off rivals' access to the virtualisation all-star once the deal closes.

This followed the announcement in July by the US Federal Trade Commission that it too was taking a deeper "second request" look at the merger.

Meanwhile in the UK, the Competition Markets Authority stepped in to probe whether the buy would result in a "substantial lessening" of competition within any market or markets in the UK for goods or services.