Broadcom is acquiring VMware for $61 billion (56.8 billion euros). With the acquisition, the chip manufacturer aims to transform itself into an enterprise infrastructure and software provider.
Last week it was announced that the companies were holding talks about a possible acquisition. Those talks have indeed led to an actual purchase of VMware by Broadcom. The $61 billion amount makes the purchase one of the largest ever in the tech industry.
Broadcom will pay half of the acquisition amount in cash for all VMware shares. The price of a share of VMware is $142.50, 40 percent more than share value before rumors of the negotiations arose. The other half of the acquisition amount will be paid in Broadcom shares. The chip manufacturer took out a new $32 billion loan for the deal.
VMware to become software arm of Broadcom
Following the final acquisition, the chip manufacturer’s existing enterprise infrastructure and security software portfolio, obtained after previous acquisitions of CA Technologies and Symantec’s enterprise security business, is planned to operate under the VMware banner.
Combined with VMware technology, enterprise customers should get a complete platform for greater innovation and should be able to meet the most important and critical infrastructure challenges. Of course also for building, running, managing, connecting, securing and migrating applications wherever they reside; in edge environments, the on-premises data center or in the (multi)cloud. In combination with the hardware technology of parent company Broadcom, it should offer more possibilities for customers and partners.
CEOs see added value for customers
Both companies are obviously pleased with the success of the acquisition. According to CEO Hock Tan of Singapore-based Broadcom, the acquisition of VMware offers many opportunities for innovation, as well as more value for shareholders.
CEO Raghu Raghuram of VMware sees that the combined capabilities of the two companies can greatly benefit customers. Especially in terms of innovative solutions and choice. These advantages, he says, will help customers navigate more easily in the complex (multi)cloud environments that are coming their way.
The acquisition is still subject to approval from various regulators, but should be completed in Broadcom’s fiscal year 2023, according to both parties.