Chip maker Broadcom’s (AVGO) $69 billion acquisition of VMWare (NYSE:VMW) could be in trouble, as the Chinese regulatory authority considers delaying it, according to a Financial Times report. The report states that China’s State Administration of Market Regulation is likely to delay approving the deal. Shares of VMWare slid in pre-market trading following the news.
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The Chinese regulatory authority is contemplating this move following new chip restrictions imposed by the U.S. earlier this week. The geopolitical tension between the U.S. and China has resulted in U.S. companies requiring additional consultations with the country’s Ministry of Foreign Affairs and the State Council. The report quoted an unnamed source as saying, “Their involvement adds to the political nature of the process.”
VMWare stated that it expects the deal to close by October 30 this year.
Is VMware a Buy, Sell, or Hold?
Analysts remain sidelined about VMW stock, with a Hold consensus rating based on four Holds. The average VMW price target is $169, implying an upside potential of 1.6% from current levels.
