Chipmaker Broadcom to buy cloud services firm VMware in $61 bln deal

Chipmaker Broadcom Inc is buying cloud services provider VMware Inc in a cash-and-stock deal valued at $61 billion to speed up its expansion into the enterprise software business. The purchase announced on Thursday is the second-biggest globally so far in 2022, after Microsoft Corp's $68.7 billion buyout of video game maker Activision Blizzard Inc .


Reuters | Updated: 26-05-2022 17:23 IST | Created: 26-05-2022 17:00 IST
Chipmaker Broadcom to buy cloud services firm VMware in $61 bln deal
Representative Image Image Credit: Flickr

Chipmaker Broadcom Inc is buying cloud services provider VMware Inc in a cash-and-stock deal valued at $61 billion to speed up its expansion into the enterprise software business.

The purchase announced on Thursday is the second-biggest globally so far in 2022, after Microsoft Corp's $68.7 billion buyout of video game maker Activision Blizzard Inc . VMware shareholders will get $142.50 per share under the purchase, resulting in a premium of nearly 49% to the stock's close on May 22, when talks of the deal were first reported. Broadcom will assume $8 billion of VMware net debt, the company said.

Broadcom shares were up 1.6% in premarket trading, while VMWare fell nearly 1%. Broadcom Chief Executive Officer Hock Tan had said the company is seeing that enterprise spending is "on fire". Buying VMware would give Broadcom access to the software firm's cloud clients and their data centers, and will help it capitalize on this trend further.

Software became a substantial part of Broadcom's business after it acquired CA Technologies for $18.9 billion in 2018 and Symantec's security division for $10.7 billion in 2019. The bid to buy VMware is Broadcom's second-biggest takeover attempt, after its failed attempt to buy smartphone chip behemoth Qualcomm Inc for more than $100 billion in 2018.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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