Broadcom announces acquisition of VMware for $61 Billion in cash and stock
Broadcom announced that it will acquire VMware in a cash-and-stock transaction, based on the closing price of Broadcom common stock on May 25, 2022, for a total transaction value of approximately $61 billion and is expected to close in 2023. In addition, Broadcom will assume $8 billion in net VMware debt. Following the transaction, Broadcom’s software division will be renamed VMware, with existing infrastructure and security software solutions integrated into VMware as part of the expansion to continue operations.
“Broadcom”by nmcbean is licensed under CC BY-NC-ND 2.0
It is the third-largest global tech industry acquisition after Dell’s $67 billion acquisition of EMC in 2015 and Microsoft’s $68.7 billion acquisition of gaming giant Activision Blizzard earlier this year. Broadcom values VMware at $142.50 a share, a 44% premium to its closing price on May 20 when the acquisition first broke. It’s worth mentioning that Dell spun off VMware about a year ago, after being acquired as part of the Dell-EMC deal.
Broadcom’s chips are involved in all aspects of daily life, including storage, networking, and wireless technologies, and are widely used in the PC, mobile devices, and automotive industries. Broadcom also has a broad portfolio of enterprise-class hardware and software products, which is undoubtedly even more powerful when combined with VMware, which focuses on virtualization and cloud computing on various platforms.
Tom Krause, President of the Broadcom Software Group, said, “VMware has long been recognized for its enterprise software leadership, and through this transaction we will provide customers worldwide with the next generation of infrastructure software. VMware’s platform and Broadcom’s infrastructure software solutions address different but important enterprise needs, and the combined company will be able to serve them more effectively and securely. We have deep respect for VMware’s customer focus and innovation track record, and look forward to bringing together our two organizations.”
