Broadcom buys VMware for $61 billion

Broadcom buys VMware for  billion

Broadcom, an American company dedicated to the manufacture of semiconductors, has announced the VMWare purchase process, virtualization software company formerly owned by Dell Inc, for $61 billion. The chip development firm has secured it’s a statement that the acquisition will allow offering “greater choice and flexibility” to business customers in order to “address the most complex challenges of IT infrastructure”.

The purchase, in particular, will be carried out through a transaction of cash and shares valued at 142.50 dollars per share. This represents a total amount of 61,000 million dollars. Broadcom will also take over VMware’s $8 billion net debt. The company specializing in the manufacture of integrated circuits expects that the acquisition of VMWare will translate into pro forma revenues of more than 40,000 million dollars, something that will cause 49% growth in software-related earnings.

“Through this transaction we will provide customers around the world with the next generation of infrastructure software. The VMware platform and Broadcom’s infrastructure software solutions address different but important business needs, and the combined company will be able to serve them seamlessly. more efficient and secure,” said Tom Krause, president of the Broadcom Software Group.

The transaction is expected to be completed during 2023. In the meantime, VMware may negotiate its sale with other companies, at least up to 40 days from the date of execution of the definitive agreement. The period, therefore, will expire on July 5.

Broadcom adds a new company to its acquisition portfolio

Broadcom’s purchase of VMWare isn’t the only one the company has made. In fact, the American semiconductor manufacturer is known for gaining market share based on acquisitions other companies. One of them is CA Technologies, dedicated precisely to software development. The CA Technologies transaction closed in 2018 for $18.9 billion.

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Broadcom also tried to acquire Qualcomm. However, the negotiations ceased in 2018, after Donald Trump prohibited the purchase because, according to the former president, it could interfere with the national security of the United States.

In any case, and at least so far, the purchase of VMWare by Broadcom is the second largest so far this year. It is second only to Microsoft, which acquired the video game development company Activision Blizzard Inc for $68.7 billion. Behind him is Elon Musk, who despite his concerns, plans to acquire Twitter for 44,000 million dollars.