Broadcom to Buy VMware for $61 Billion in Record Tech Deal
Broadcom Inc. agreed to buy cloud-computing company VMware Inc. for about $61 billion in one of the largest technology deals of all time, turning the chipmaker into a bigger force in software.
VMware shareholders can choose to receive either $142.50 in cash or 0.2520 shares of Broadcom stock for each VMware share, according to a statement on Thursday. The offer represents about a 44% premium to VMware’s closing price on May 20, the last trading day before Bloomberg News reported potential takeover talks.
The deal is the biggest takeover ever for a chipmaker and extends an acquisition spree for Broadcom Chief Executive Officer Hock Tan, who has built one of the largest and most diversified companies in the industry. VMware bolsters Broadcom’s software offerings -- a key part of Tan’s strategy in recent years. He acquired corporate-software maker CA Technologies in 2018 and Symantec Corp.’s enterprise security business in 2019.
Broadcom’s offer -- coming during a market downturn for tech stocks -- has the support of key VMware shareholders Michael Dell and Silver Lake, and includes a so-called go-shop provision that allows VMware to solicit competing offers.
Broadcom, one of the most valuable companies in the chip industry, sells components for everything from the iPhone to industrial equipment. But it’s seeing some of its biggest growth from data centers -- the massive server hubs that power cloud-computing services -- and bulking up on software helps it further serve that market.
The purchase adds to a run of deals for the global tech industry this year. Microsoft Corp. agreed in January to buy video game publisher Activision Blizzard Inc. for $69 billion. A consortium backed by Vista Equity Partners is acquiring software
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