Market Updates
Broadcom Agrees to Acquire VMWare for $61 Billion
Barry Adams
26 May, 2022
New York City
Broadcom Inc agreed to acquire VMWare, Inc for $61 billion in a cash and stock deal.
The deal price is based on the closing price of Broadcom stock on May 25 and Broadcom will assume $8 billion of VMWare's net debt.
The deal diversifies Broadcom from a semiconductor company to a higher margin enterprise software company active in cloud infrastructure and network management.
VMWare acquisition is the largest tech deal only to be surpassed by the impending acquisition of Activision Blizzard by Microsoft for $69 billion and Dell's purchase of EMC for $67 billion in 2016.
Broadcom has been on an acquisition spree and completed the purchase of the troubled software developer CA Technologies for $18.9 billion in 2018 and the cyber security company Symantec for $10.7 billion in 2019.
Dell Technologies acquired EMC including VMWare in a leveraged buyout and was spun off on November 1, 2021 to repay debt.
Separately, Broadcom reported sales in the fiscal 2022 second quarter ending on May 1 increased 23% to $8.1 billion and net income jumped 78% to $2.59 billion or $5.93 per share.
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