Semiconductor giant Broadcom said on Thursday it had agreed to buy software company VMware in a 61 billion transaction. The deal will equip Broadcom with popular computing tools used by a large group of corporations and reshape the vast market for enterprise computing technology.
The chip company will spend the equivalent of $ 138.23 per share in cash and stock deals for VMware, it said in a statement. That’s 40 percent more than VMware’s stock price before rumors of a deal spread over the weekend.
This combination will make Broadcom a significant player in data-center technology and cloud computing. It will also be the world’s second-largest proposed acquisition this year, according to data from Dealogic. (Microsoft’s ડ 75 billion bid is the largest for Activision Blizzard.) VMware has over 500,000 customers worldwide, and is considered a partner by all major cloud providers, including Amazon, Microsoft and Google. He called VMware the chief executive of Broadcom, Hawk E. Makes a valuable asset for Tan.
Mr. President Donald J. Until Trump blocked the 2018 117 billion takeover of Broadcom’s proposed chip maker Qualcomm in March 2018 on national security grounds, Ten was one of the biggest acquisition forces in the chip industry, bringing Broadcom together. Broadcom, which was based in Singapore at the time, has moved its headquarters to San Jose, Calif.
Since then, Mr. Ten has diversified its goals. It later bought software company CA Technologies for 18 18.9 billion in 2018 and Symantec’s security division for 10. 10.7 billion in 2019.
With its so-called virtualization software, which allows a computer to function like many machines and essentially make computing more efficient, VMware will be Broadcom’s main asset. VMware posted revenue of 12.9 billion in its last fiscal year, which ended in January. 28. It was an increase of 9 per cent over the previous year. That growth rate was much slower than the cloud-computing arms of Amazon, Microsoft and Google. Founded in 1998, before the cloud boom, VMware relied on clients who still managed their own data centers.
The deal will be the latest in a series of major changes for VMware. The company, based in Palo Alto, California, lost its longtime chief executive, Pat Gelsinger, to Intel in January 2021. On May 12, he lost his new chief executive, Raghu Raghuram, and a chief operating officer, Sanjay Poonen, the same day. In November, the software maker became independent when it split from Dell Technologies.
Under Shri. Gelsinger, the VMware personal computer maker that owns the majority of its shares, was eager to extricate itself. Dale acquired its stake through the acquisition of EMC, the previous majority owner of VMware. VMware envisioned independence as a strategic advantage, allowing it to forge new alliances with various technology providers. He also believed that if he split from Dell, Wall Street would reward him with a higher share price.
Instead, the company’s stock fell 19 percent from the beginning of the year to Friday, just before the last trading day before Bloomberg reported negotiations with Broadcom.
Deutsche Bank analyst Brad Zelnick said VMware has lost the luster of public investors as it struggles to compete with new cloud technologies.
“They have been challenged as a business to adapt to this transition,” Mr. Zelnik said.
That stock recession made VMware a more lucrative target for Mr. Ten, and if shareholders and regulators approve the deal, VMware’s long-awaited independence will already be over.