Chipmaker Broadcom to buy VMware in $61 bln deal

Broadcom Inc said on Thursday it will buy cloud service provider VMware Inc in a $61 billion cash-and-stock deal to further diversify the chipmaker's business into enterprise software. Broadcom's shares were up 1.6%, while those of VMWare were down nearly 1% in premarket trading.

Broadcom Inc said on Thursday it will buy cloud service provider VMware Inc in a $61 billion cash-and-stock deal to further diversify the chipmaker's business into enterprise software.

Broadcom's shares were up 1.6%, while those of VMWare were down nearly 1% in premarket trading. The acquisition is the second biggest announced globally so far this year, after Microsoft Corp's $68.7 billion deal to buy video game maker Activision Blizzard Inc in January.

Each VMware shareholder will get $142.50 per share, resulting in a premium of over 48% to the stock's close since the deal talks were first reported on May 22. VMware shareholders will get $142.50 in cash or 0.2520 shares of a Broadcom common stock for each VMware share held.