Looks like there has been an update. Not sure what it means but it states that the deadline has been suspended?
https://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_10806
17 replies (most recent on top)
The rumors at Carbon Black is that a spin off is the most likely result for them.
If what @1bsy+1kYSo9Qk said is true, its scary. Time to sell the vmware shares? If deal fails, I fear vmw may go down to 90$ per share.
I just don’t see how the company can continue without a massive cut in operating expenses. Cost of sales is crazy for an infrastructure software provider but with sales hurting it’s not like they can cut sales costs without making things even worse. That means looking for other ways to cut opex, which means cutting budgets and backfills. (Is your team backfilling? Are you doing in-person training or are you dialing in from your basement?)
Revenue is not increasing and opex cuts can only go so deep. VMW is a distressed asset and BC is one of a very few companies around who can afford the price to buy and the time to cut out the cancer that is ki-ling it. There is a very well-defined playbook here and it ends with VMW becoming the next Novell. It was a good run but it’s been over for a while and it’s time to find the next thing.
the regulatory approvals hardly matter.
By the time all closing conditions are met the banks (who pledged $32B in financing for this deal) will need to raise the capital via the bond market. In the Citrix / Tibco deal (which was only $10B in debt), banks needed to make concessions and ended up with an effective interest rate of about 10%. By the time this deal is ready to close, expect rates on these bonds to come in at 10-13%. That's roughly $4B in interest payments annually to acquire a company with only $3-$4B in annual profits. There comes a time when this whole deal doesn't make sense based on the financials alone. A $1.5B breakup fee will be the more attractive option.
At that point, the board will replace the sr. leadership and the company will be half the size with only the most profitable core technologies remaining. Some businesses may be sold off, the rest may be acquired for half of what broadcom offered. Maybe $20B for the SDDC stack with everything else divested. Maybe Dell will buy it back.
anyone have the ability to get full access to the article?
@jjz+1kYSo9Qk PREACH! 🙌
VMW is an asset in desperate need of restructure and renovation. It's like an old house that still has some residual value, but it needs to be gutted and rebuilt.
VMW enjoyed a monopoly of sorts for most of its history. But the market has changed. Please understand this.
This assessment of how BC will make the numbers work post-acquisition is spot on.
Tech layoff is everywhere recently and layoff is coming at VMware. We can only do what we can do. Let's prepare ourselves emotionally, financially and more important technically competent. Let's encourage and share information with each other. Hope we all come out stronger and happier.
"Stop fear-mongering. You have no insight into layoffs or how big they will be. "
Actually we do. Broadcom has stated their playbook: Lay off a huge amount of workers, focus on the top 1000 customers by spend.
Not only has Broadcom stated this, they have run that playbook on their previous acquisitions. And in fact Broadcom sold their buyout of VMware by citing that exact same playbook.
Broadcom HAS TO cut at least a third of VMware workforce just to make their numbers work. At least a third. The market won't put up with any fewer.
Big layoffs are coming eventually no matter what!
Stop fear-mongering. You have no insight into layoffs or how big they will be.
They will need to sell off Carbon Black before it goes through no way the EU lets them get away with having Symantec and CB under the same roof.
Don’t let this distract you. Big layoffs are coming eventually no matter what!
Focus on your personal situation. Improve yourself, save your money, cut your spending, be wise not foolish, focus on the moment, develop good habits, cherish the people around you and every breath you take now.
What does it mean? Is EU going to reject the deal?
Not necessarily, but they certainly didn't get a good first impression, it merely means that the deadline for a decision has been put on ice and will restart once they get what they want from VMware and bcom ...
Hock gives me Elon vibes with the behaviour ...
Hock can’t bully his way through this review. Not providing he info required is just stupid, Either way, this doesn’t look good from broadcoms perspective and only delays the sign off.
More delays…. Good or bad depends on your strategy.
What does it mean? Is EU going to reject the deal?
I guess they're not providing answers fast enough for the EU
https://news.bloomberglaw.com/antitrust/eu-stops-clock-on-broadcom-vmware-review-to-seek-deal-info-2
EU Stops Clock on Broadcom-VMWare Review to Seek Deal Info (2)
BY STEPHANIE BODONI
Jan. 31, 2023, 10:03 AM
European Union regulators stopped the clock on their in-depth review of Broadcom Inc.’s proposed $61 billion takeover of cloud-computing company VMware Inc. after seeking further details about the deal.
“This procedure in merger investigations is activated if the parties fail to provide, in a timely fashion, an important piece of information that the commission has requested from them,” European Commission says in a email
The review will continue “once the missing information is supplied by the parties” and the deadline for a final decision will be re-adjusted, it says
Broadcom says in emailed statement it “will continue to engage with ...
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