Computer chip and software maker Broadcom announced its plan to acquire cloud technology company VMware for $61billion. In a media advisory, Broadcom said the transaction will add significant scale to our software business and continues our track record of acquiring established, mission-critical platforms.”
The Broadcom Software Group will rebrand and operate its existing infrastructure and security software solutions as VMware. The deal will also include $8 billion of VMware net debt.
Broadcom is a Fortune 500 company and a known innovator of semiconductor solutions for wired and wireless communications.
According to AP, VMware shareholders will receive “either $142.50 in cash or 0.2520 shares of Broadcom common stock for each VMware share.” Broadcom shareholders will own about 88% of the company and VMware shareholders will own the remaining 12%.
VMware is an enterprise software firm that pioneered virtualization technology, with headquarters in California.
In November 2021, VMware announced the completion of the spinoff from Dell Technologies for an $11.5-billion special cash dividend. Michael Dell, founder and CEO of Dell, owns 40.2% of the company’s outstanding shares.
“Until we complete the transaction, which we expect to happen in Broadcom’s fiscal year 2023, Broadcom and VMware will continue operating independently,” Broadcom said. “Your day-to-day contacts will remain the same, and we will continue to provide you with the excellent service and innovative offerings that you have come to expect from us. In short, it is business as usual, and we expect this to be a seamless transition from your perspective.”