VMware falls amid report about China's review of Broadcom deal (update)
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Update 4:15pm: Updates with closing share prices.
VMWare (NYSE:VMW) dropped 7.7%
amid a report about China's review of the firm's more than $60 billion sale to Broadcom (NASDAQ:AVGO). Broadcom fell 2%. The deal spread widened to $17.24 from $6.09 on Monday. 
The timing of the China antitrust regulator's deal approval appears to now depend on the macro environment, according to traders, who cited a report that was circulating on Tuesday. While there don't appear to be issues with the proposed remedy, the China regulator may take additional time to finalize its review.
Separately, Dealreporter said that two source familiar told the publication that SAMR is expected to approved the deal before the end of October. 
"We continue to expect the deal to close on October 30, 2023," a VMware (VMW) spokesman said in a statement emailed to Seeking Alpha. Broadcom (AVGO) also told Dealreporter it expects the transaction to close at the same time.
The VMware report comes amid a report from Bloomberg that the U.S. brought in new updates which would curb the sale of chips that Nvidia (NVDA) made for the Chinese market, part of Washington's export restrictions aimed at hindering China's access to advanced semiconductor technology.
A source familiar also told Dealreporter that SAMR's decision on VMW/AVGO is unlikey to be impacted by Biden administration's new curbs on chips. Though geopolitical considerations do play a part in the deal review, the chip restrictions aren't an issue.
The VMW deal stlll needs an approval from the State Council or central committee level. 
Korea's antitrust regulator is expected to approve the transaction this month, Dealreporter also reported. 
The latest update comes after a Dealreporter item on Thursday that said Broadcom (AVGO) is expected to be granted conditional Chinese antitrust approval soon for the VMware (VMW) purchase. China's State Administration for Market Regulation is expected to shortly approve the acquisition of VMware with behavioral remedies.
A report late last month that SAMR is likely to approve the deal without major changes. Approval may still be weeks away, and a market test is ongoing. It's possible the deal is approved in October or in November, according to the report in late September. 
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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