Broadcom is acquiring cloud computing and virtualization technology company VMware in a cash and stock deal worth $61 billion. Broadcom will also assume $8 billion of VMware net debt. After the deal was confirmed, Broadcom’s shares went up by 1.6 percent and shares of VMWare were down by nearly 1 percent in premarket trading.
VMware shareholders will get $142.50 per share and 0.2520 shares of a Broadcom common stock for each VMware. Broadcom is also now planning to rebrand Broadcom Software Group to VMware.
Broadcom is known for designing and manufacturing semiconductors for modems, Wi-Fi, and Bluetooth chips across multiple devices. VMware offers cloud computing and virtualization technology. VMware was founded in 2003 and was acquired by EMC in 2004. Later, Dell acquired EMC in 2016 and VMWare became part of Dell EMC.
“Combining our assets and talented team with Broadcom’s existing enterprise software portfolio, all housed under the VMware brand, creates a remarkable enterprise software player,” says Raghu Raghuram, CEO of VMware.
This is the second biggest acquisition of the year after Microsoft’s Activision Blizzard acquisition of $68.7 billion. Broadcom previously tried to acquire Qualcomm for more than $100 billion but the Trump administration blocked the deal.
The deal is expected to close sometime in fiscal 2023 if it gets regulatory approval.
