Broadcom announced that it will acquire cloud service provider and virtual machine software giant VMware for $61 billion in cash or stock.
Broadcom will acquire VMware in a cash and stock transaction of $61 billion, based on the closing price of Broadcom's common stock on May 25, 2022, the companies announced Thursday.
The deal would be one of the largest technology acquisitions ever, trailed only by Microsoft's $69 billion acquisition of Activision Blizzard and Dell's $67 billion acquisition of EMC in 2016.
Broadcom's acquisition of VMware will help the company move from its core business of designing and selling semiconductors to enterprise software for greater profits. Businesses use VMware's products to run their own servers and cloud servers more efficiently.
Broadcom is the most acquiring semiconductor company, using mergers strategically in recent years to fuel its growth. It previously acquired CA Technologies for $18.9 billion in 2018 and Symantec in 2019 for $10.7 billion.
But Broadcom hasn't made a major acquisition since 2019. In March, Broadcom Chief Executive Hock Tan said the company was "capable of making large acquisitions."
Broadcom had planned to buy Qualcomm for $117 billion in 2018, but the then-President of the United States blocked the deal on national security grounds.
VMware spun off from Dell late last year to pay down debt. Dell originally acquired the company when it acquired EMC in 2016. Dell CEO and founder Michael Dell owns about 40 percent of VMware.
News of the deal broke over the weekend, sending Broadcom shares lower. VMWare shares rose more than 24% on Monday.
Broadcom Corporation is the world's leading semiconductor company for wired and wireless communications. Its products enable the delivery of voice, data and multimedia to and within home, office and mobile environments. Broadcom provides manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices with the industry's broadest range of best-in-class system-on-chip and software solutions.
VMware, headquartered in Palo Alto, California, USA, is a global cloud infrastructure and mobile commerce solutions provider. It provides VMware-based solutions. Enterprises can integrate business through data center transformation and public cloud, maintain customer trust through enterprise security transformation, and achieve any Run, manage, connect, and secure any application in the cloud and on your device.
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