Broadcom announced that it will acquire virtualization pioneer VMWare for $61 billion in cash and stock.
“Building upon our proven track record of successful M&A [mergers and acquisitions], this transaction combines our leading semiconductor and infrastructure software businesses with an iconic pioneer and innovator in enterprise software as we reimagine what we can deliver to customers as a leading infrastructure technology company,” Broadcom president and CEO Hock Tan said. “We look forward to VMware’s talented team joining Broadcom, further cultivating a shared culture of innovation and driving even greater value for our combined stakeholders, including both sets of shareholders.”
VMWare, an early proponent of virtualization, has been involved in multiple acquisitions over the years. In early 2004, the firm was acquired by EMC for $625 million in cash. But then Dell acquired EMC in 2016 for an incredible $67 billion. In early 2021, after VMWare CEO Pat Gelsinger left the company to lead microprocessor giant Intel, Dell announced that it would sell off its remaining stake in VMWare, and then it spun off the company.
With the Broadcom acquisition, the Broadcom Software Group will rebrand itself and operate as VMware once the transaction is complete, “incorporating Broadcom’s existing infrastructure and security software solutions as part of an expanded VMware portfolio.” Broadcom says that the two company’s portfolios are “complementary” and that the combined company will be an infrastructure powerhouse.
“VMware has been reshaping the IT landscape for the past 24 years, helping our customers become digital businesses,” VMWare CEO Raghu Raghuram said. “We stand for innovation and unwavering support of our customers and their most important business operations and now we are extending our commitment to exceptional service and innovation by becoming the new software platform for Broadcom. Combining our assets and talented team with Broadcom’s existing enterprise software portfolio, all housed under the VMware brand, creates a remarkable enterprise software player. Collectively, we will deliver even more choice, value and innovation to customers, enabling them to thrive in this increasingly complex multi-cloud era.”
Broadcom expects the transaction to be completed in its 2023 fiscal year, which ends May 1, 2023, subject to regulatory and shareholder approval.
Tagged with virtualization, VMWare