Hock Tan, CEO of Broadcom
Martin H. Simon | Bloomberg | Getty pictures
Broadcom will buy VMware in a $ 61 billion cash-and-share transaction, based on the closing price of Broadcom’s ordinary shares on May 25, 2022, the companies announced on Thursday.
The deal will be one of the largest technology acquisitions of all time, behind Microsoft̵[ads1]7;s pending $ 69 billion deal to buy Activision Blizzard and Dell’s $ 67 billion acquisition of EMC in 2016.
Broadcom’s acquisition of VMware will help the company diversify away from its core business of designing and selling semiconductors to enterprise software, which may have larger margins. VMware’s products are used by companies to more efficiently operate their own servers as well as cloud servers.
Broadcom is the most acquired semiconductor company and has strategically used mergers to drive growth in recent years. It previously acquired CA Technologies in 2018 for $ 18.9 billion and Symantec in 2019 for $ 10.7 billion.
But Broadcom had not made a major acquisition since 2019. In March, Broadcom CEO Hock Tan said the company had “the capacity to make a good-sized acquisition.”
Broadcom planned to buy Qualcomm in 2018 for $ 117 billion before the deal was thwarted by then-President Donald Trump, citing national security.
VMware was spun off from Dell late last year in an attempt to pay down debt. Dell originally acquired the company when it acquired EMC in 2016. Michael Dell, CEO and founder of Dell, owns around 40% of VMware.
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