VMware/Broadcom deal spread narrows amid report about China's review
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The deal spread in Broadcom's (NASDAQ:AVGO) planned $61 billion purchase of VMware (NYSE:NYSE:VMW) narrowed amid a report about China's review of the combination. The spread narrowed to $8.62 from $9.56 on Monday.
China's State Administration for Market Regulation is likely to approve the deal without major changes, according to traders, who cited a report that was circulating on Tuesday. Approval may still be weeks away, and a market test is ongoing. It's possible the deal is approved next month or in November. 
The deal spread also narrowed on Friday in the wake of a report that China's antitrust regulator was in the final stage of its review and that the remedy proposal was supported by the authority's staff, according to traders. 
The latest update on the China review comes after Dealreporter last Wednesday said SAMR paused its review of the deal as the regulator has advanced remedy talks with the parties. Broadcom also confirmed to the publication that the HSR waiting periods have expired and there is no legal impediment to closing under U.S. merger regulations. Broadcom (AVGO) reiterated that the deal will close in its fiscal year 2023.
Traders are focused on China as it is the last major approval needed for the transaction to close after it received clearance in the UK last month and the HSR waiting period in the U.S. expired.

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