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United States securities and exchange commission logo
August 9, 2022
Mark Brazeal
Chief Legal and Corporate Affairs Officer
Broadcom Inc.
1320 Ridder Park Drive
San Jose, California 95131-2313
Re: Broadcom Inc.
Registration
Statement on Form S-4
Filed July 15, 2022
File No. 333-266181
Dear Mr. Brazeal:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4 filed July 15, 2022
Q: Will the Broadcom common stock received at the time of completion of
the second merger be
traded on an exchange?, page 4
1. Revise the Q&A to
disclose which of the most material conditions of the merger are able
to be waived, such as,
for example, the condition that Nasdaq approve the listing of
Broadcom common stock
to be issued to VMware stockholders in the second merger.
Revise the risk factor
"Completion of the transactions is subject to the conditions" on page
26 to describe what
kinds of conditions could be waived and the negative effects it could
have.
Mark Brazeal
FirstName LastNameMark Brazeal
Broadcom Inc.
Comapany
August NameBroadcom Inc.
9, 2022
August
Page 2 9, 2022 Page 2
FirstName LastName
Summary
The transactions and the merger agreement, page 11
2. You disclose diagrams depicting the first, second and third mergers.
Please explain why
this structure was chosen.
Merger Consideration, page 14
3. We note your disclosure regarding the merger consideration that
shareholders of
VMware may elect to receive, for each share of VMware common stock,
either cash
consideration in the amount of $142.50 or stock consideration in the
amount 0.25200 of a
share of Broadcom common stock. You further clarify that this election
is subject to
proration based on the requirement in the Merger Agreement that there
be a 50%
cash/50% stock allocation with respect to the total consideration
paid. It is unclear from
your disclosure, however, the extent to which an individual s
election might be impacted
by the 50% cash/50% stock allocation requirement. Please revise your
disclosure to
explain in greater detail and/or to provide illustrative examples of
the extent to which an
election to receive all cash, an election to receive all stock, or an
election to receive a
combination of both cash and stock could be impacted by the 50%
cash/50% stock
allocation requirement. In this respect, please disclose the maximum
extent to which the
consideration actually received potentially would vary from VMware
stockholders
elections to receive all cash and all stock.
Material Tax Consequences, page 16
4. We note your disclosure that completion of the transactions is
conditioned upon receipt by
VMware of a written opinion of Gibson, Dunn & Crutcher LLP to the
effect that, for U.S.
federal income tax purposes, the first merger and LLC conversion, and
the Second and
Third Mergers, are intended to qualify as a reorganization under
Section 368(a) of the
Code. Insofar as this appears to be a waivable condition, please file
an executed opinion of
counsel before effectiveness even though the merger agreement is
conditioned upon the
receipt of the favorable tax opinion at closing. See Section III.D.3
of Staff Legal Bulletin
19 (October 14, 2011).
The transactions could cause VMware's spin-off from Dell Technologies, Inc. to
become a
taxable transaction, page 27
5. Please expand your disclosure here or elsewhere in the filing to
discuss the material terms
of the tax matters agreement. You disclose that VMware received an
opinion from Gibson
Dunn, counsel to VMware, to the effect that the transactions will not
result in the VMware
spin-off failing to qualify as a tax-free transaction under Section
355 of the Code, and a
closing condition of the transactions is that the opinion is not
revoked, substantively
modified or withdrawn (unless an acceptable replacement opinion has
been received).
Please revise to clarify if this condition can be waived and, if so,
the consequences.
Mark Brazeal
FirstName LastNameMark Brazeal
Broadcom Inc.
Comapany
August NameBroadcom Inc.
9, 2022
August
Page 3 9, 2022 Page 3
FirstName LastName
Certain Financial Projections, page 57
6. Please revise to disclose all material assumptions underlying the
projected financial
information included in your document, and quantify to the extent
possible. Explain how
each of these assumptions resulted in the numbers included in the
tables.
Material U.S. Federal Income Tax Consequences, page 80
7. Please revise the disclosure to identify counsel providing the
opinion and to state clearly
that the disclosure is counsel's opinion as to the tax consequences.
If counsel cannot give
a will opinion, it may provide an opinion subject to
uncertainty, such as "should" or
"more likely than not," but the disclosure should describe the degree
of uncertainty in the
opinion and provide risk factor and/or other appropriate disclosure
setting forth the risks
of uncertain tax treatment to investors.
Unaudited Pro Forma Condensed Combined Financial Information
Unaudited Pro Forma Condensed Combined Balance Sheet, page 122
8. Please revise the pro forma balance sheet to disclose the number of
shares issued and
outstanding on a historical and pro forma basis.
2. Significant Accounting Policies, page 127
9. We note your disclosure in Note 2(d) that the adjustment represents
the reclassification of
license revenue to product revenue. Please explain to us and revise to
disclose why you
believe this reclassification is appropriate. In this regard, it
appears from the notes to the
financial statements included in Broadcom's Form 10-K for the year
ended October 31,
2021, that software license revenue is included in its "subscriptions
and services" subtotal
on the income statement. Please advise or revise accordingly.
3. Calculation of Merger Consideration and Preliminary Purchase Price
allocation of the
Transactions, page 128
10. Please revise Note 3 (1) and (2) and Note 4(a) to clarify that the
preliminary merger
consideration is calculated based on the number of shares of VMware
common stock
outstanding as of July 13, 2022, if true, and the amount of those
shares.
4. Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined
Balance
Sheet, page 130
11. Refer to Note 4(e) and 5(d). Please tell us how you concluded it was
appropriate to
eliminate VMware s historical deferred commissions earned by its
sales force and the
related historical amortization expense, and how you considered these
balances in the fair
value measurement of customer relationships.
Mark Brazeal
Broadcom Inc.
August 9, 2022
Page 4
5. Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined
Statements of Operations, page 132
12. We note that for both the year ended October 31, 2021 and the interim
period ended May
1, 2022, adjustment 5(f) appears to represent a benefit from income
taxes, rather than
additional income tax expense. Please revise your disclosure in Note 5(f)
to explain why
the transaction accounting adjustments, which resulted in an aggregate
increase in
expenses, resulted in this tax benefit.
13. We note from your disclosures in Notes 5(c) and 5(h) that this adjustment
includes a non-
recurring expense. Please revise to disclose the tax effects related to
this non-recurring
adjustment in accordance with Rule 11-02(a)(11)(i) of Regulation S-X.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact SiSi Cheng, Staff Accountant at (202) 551-5004 or Claire
Erlanger,
Staff Accountant at (202) 551-3301 if you have questions regarding comments on
the financial
statements and related matters. Please contact Sherry Haywood, Staff Attorney
at (202) 551-
3345 or Geoffrey Kruczek, Staff Attorney at (202) 551-3641 with any other
questions.
Sincerely,
FirstName LastNameMark Brazeal
Division of
Corporation Finance
Comapany NameBroadcom Inc.
Office of
Manufacturing
August 9, 2022 Page 4
cc: Ronald Chen
FirstName LastName