EU approves Broadcom’s $61 billion acquisition of VMware

The European Union recently sanctioned Broadcom’s acquisition of VMware for a sum of $61 billion. However, the stipulations of the approval demand that Broadcom abstains from merging VMware with its existing software ventures, ensuring compatibility between VMware services and third-party server equipment, thereby circumventing any potential monopolistic market dynamics.

In subsequent revelations, Broadcom confirmed receiving approvals for the VMware acquisition from not just the European Union but from countries such as Australia, Canada, and South Africa as well. Nevertheless, it still awaits the endorsement of the Federal Trade Commission of the United States and the United Kingdom’s Competition and Market Authority to finalize the acquisition.

Should Broadcom successfully acquire VMware, the deal will rank as one of the most substantial technology acquisitions, surpassed only by Microsoft’s purchase of Activision Blizzard for $68.7 billion and Dell’s procurement of EMC for $67 billion. The acquisition of VMware is projected to bolster Broadcom’s profits substantially, compensating for the losses incurred from the unsuccessful Qualcomm acquisition in 2018.

As per Broadcom’s prior assertions, the purchase of VMware will incorporate all its externally traded equity for $61 billion. Among this, $32 billion will be sourced via bank syndicate financing. In addition, Broadcom will assume approximately $8 billion of VMware’s debt. The current shareholders of VMware will have the option to either divest their holdings at a rate of $142 per share or exchange each share for 0.2520 shares of Broadcom.