Broadcom announces deal to buy VMware for $61 billion

What the market has been expecting this week has paid off: Broadcom, a developer of semiconductor infrastructure and software solutions, Thursday morning (5/26) announced an agreement to acquire VMware. Under the agreement, Broadcom will acquire all outstanding shares of VMware in a cash and equity transaction valuing VMware at approximately $61 billion, based on the May 25, 2022 ordinary share closing price. In addition, Broadcom will incur $8. billion of VMware’s net debt.

By combining Broadcom Software’s complementary portfolio with the VMware platform, the combined company will provide enterprise customers with an expanded platform of critical infrastructure solutions to accelerate innovation and meet the most complex IT infrastructure needs.

VMware, the leading provider of multi-cloud services for all applications, has pioneered virtualization technology, an innovation that has positively transformed x86 server-based computing. VMware then established the Software Defined Data Center and played a leading role in network and storage virtualization, before evolving into a Hybrid Cloud solutions provider. Today, VMware’s Multicloud portfolio, spanning application update, cloud management, cloud infrastructure, networking, security and workspaces anywhere, forms a flexible and consistent digital foundation upon which the largest and most dynamic companies in all industries build, operate, manage, connect, and secure workloads the most important and complex for the benefit of their clients.

Upon closing of the transaction, Broadcom Software Group will rebrand and operate it as VMware, integrating Broadcom’s existing infrastructure and security software solutions as part of the expanded VMware portfolio.

By combining Broadcom Software’s complementary portfolio with the VMware platform, the combined company will provide enterprise customers with an expanded platform of critical infrastructure solutions to accelerate innovation and meet the most complex IT infrastructure needs. Embedded solutions will allow customers, including leaders in all industry sectors, greater choice and flexibility to build, run, manage, connect and secure applications at scale in diverse, distributed environments, no matter where they run: from the data center to any cloud and to edge computing. Through the combined company’s combined focus on technological innovation and significant spending on research and development, Broadcom will provide compelling benefits to customers and partners.

“Building on our track record of successful mergers and acquisitions, this transaction combines our core infrastructure and semiconductor software business with an innovative pioneer and innovator in enterprise software as we reimagine what we can offer to customers as a leader in infrastructure technology,” said Huck Tan, President and CEO of Enterprise Software. Broadcom: “We look forward to having the talented team at VMware join Broadcom, leading to an increased shared culture of innovation and increased value for our common shareholders, including both groups of shareholders.”

“VMware has reshaped the IT landscape over the past 24 years, helping our customers become digital enterprises. We are expanding our commitment to exceptional service and innovation by becoming Broadcom’s new software platform. Combining our assets and talented team with a suite of software leads Broadcom’s current enterprise, all under the VMware brand, aims to create a great enterprise software player. Bringing more choice, value and innovation to customers, enabling them to thrive in this increasingly complex multi-cloud era,” commented Raghu Raghuram, CEO of VMware. .

The transaction, which is expected to close in Broadcom’s fiscal year 2023, is subject to receipt of regulatory approvals and other usual closing conditions, including approval by VMware shareholders.

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