Broadcom starts onboarding VMware employees, swaps office logos, after ‘stressful’ journey to get Beijing’s approval

US semiconductor giant Broadcom has started merging with VMware, with onboarding talks with employees beginning on Monday after it received regulatory clearance from China for its US$69 billion acquisition last week, according to an internal letter seen by the Post.

In the letter dated November 22, VMware CEO Raghu Raghuram said the “long journey” of securing approval for the deal was “uncertain and stressful, especially in the last few weeks”, according to a copy shared with the Post. Now that it has the green light, though, Broadcom will start employee communications from Monday.

Broadcom has started to refurbish offices with its own branding across multiple regions. The Beijing office in Zhongguancun, known as China’s Silicon Valley, already had its logos replaced with those of Broadcom on Monday morning, according to two pictures shown to the Post. But the 1,000-odd employees in China are still waiting for more clues about their prospects for remaining at the company after Raghuram suggested that some may be subject to job changes.

Broadcom did not immediately respond to a request for comment on Monday.

Broadcom, based in San Jose, California, announced last Wednesday that it had completed the acquisition of VMware after China’s State Administration for Market Regulation (SAMR) approved the deal. The transaction faced tough regulatory scrutiny around the world over concerns of market concentration, forcing the companies to delay the closing date three times.

The delay underscored Beijing’s growing importance in reviewing and approving major acquisitions, as many tech giants have significant footprints in the country. Broadcom made roughly 35 per cent of its revenue from shipments to China, including Hong Kong, during the 2021 and 2022 financial years, according to last year’s annual report.

The SAMR’s review of the deal had been frozen for roughly six weeks and only resumed two days after Chinese President Xi Jinping and US President Joe Biden met outside San Francisco in mid-November.

An employee at VMware China said its private cloud business faces tough competition from local players seeking to replace foreign products with domestic alternatives. The company has several offices in China, according to its corporate registration.

In March, VMmare warned investors of risks related to legal conflicts arising from different rules in the US and China. Chinese laws and regulations regarding the storage and processing of data could cause its business to suffer, the company said.

Broadcom will offer existing workers either a new contract or offer a severance package, according to the VMware employee, who asked not to be named because the information was private.