South Korea Gives Conditional Nod to Broadcom-VMware, What About China?

South Korea’s antitrust authorities have given the nod to the pending Broadcom-VMware combination.

The country’s Fair Trade Commission on Monday published documents granting conditional approval to the $61 billion deal. The agency’s only main concern relates to whether Broadcom owning VMware could reduce competition in the fiber channel host bus adapter market.

“We have concluded that VMware could take advantage of its position to delay or obstruct interoperability certifications for parts produced by Broadcom’s competitors,” the KFTC said, according to The Korea Economic Daily (the FTC document was published in Korean).

The hesitation mirrors similar fears previously expressed, but since overcome, by European Union and British regulators.

To address those issues, Korea’s FTC is requiring Broadcom to license drivers for the adapters and to make the source code available. Korean authorities also tell Broadcom it must support rivals’ HBAs for the next 10 years. Finally, Broadcom now has 60 days to tell the FTC specific steps it will take to meet those demands.

Interestingly, Korea’s FTC last month hit Broadcom with a $14.3 million fine for unfair business practices with Samsung Electronics.

What’s Next for Broadcom-VMware?

The only holdup remaining in front of Broadcom-VMware comes from China. All approvals seemed on track for the much-expected Oct. 30 transaction close until last week. That’s when U.S. President Joe Biden imposed strict export controls on advanced computer chips and the equipment to make them, making it more difficult for China to get its hands on those items. After that, reports soon started circulating that China could delay its approval of Broadcom-VMware, largely as a retaliation for Biden’s move.

Related:What's Next for VMware Employees? Leaked Broadcom Email Shows 3 Options

In spite of that, a VMware spokesperson told Channel Futures the company still expects the Broadcom acquisition to be completed next week, on time. Channel Futures did not receive a response from Broadcom about whether it predicts any hiccups in that timeline.

Shares of both Broadcom and VMware were trading higher at time of publication on Monday. Broadcom had risen nearly 2% by mid-afternoon Eastern time while VMware was up more than 3%, reaching $156. That’s a stark contrast for VMware’s shares late last week when they plummeted on the news that China might throw a wrench into Broadcom-VMware’s closing plans.

Impact on VMware Employees

All the wait-and-see tension around the Broadcom-VMware deal is causing strain and stress for VMware employees. They were told they would receive information in mid- to late October about their future with Broadcom. There are three avenues in front of VMware staff: a full time role, a transitional position or immediate severance.

Related:VMware Employees Vent Over Lack of Job News, Potential Layoffs

Over at TheLayoff.com, some workers report having received offers; others are on tenterhooks and unsure how to proceed. Some also are asking whether Broadcom-VMware delays from China could impact the arrival of offer letters. Overall, the absence of information is causing distress among many VMware employees, who have been venting online as a result.