Broadcom to acquire VMware for $61 billion
Broadcom has struck a deal with VMware that will see the chipmaker buying the cloud and virtualization software firm for around $61 billion in cash and stock. As part of the acquisition, Broadcom will also take on $8 billion of VMware's net debt.
When the deal is complete, Broadcom Software Group will rebrand and operate as VMware. As part of Broadcom, the new VMware will, the company says, "offer enterprise customers greater choice and flexibility to address the most complex IT infrastructure challenges".
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The deal is set to be completed in Broadcom's fiscal year 2023, and it is the second largest buyout of the year -- with Microsoft's $68.7 billion Activision purchase slightly in the lead.
The companies say that by bringing together Broadcom Software and the VMware platform, it will be possible to "enable customers, including leaders in all industry verticals, greater choice and flexibility to build, run, manage, connect and protect applications at scale across diversified, distributed environments, regardless of where they run: from the data center, to any cloud and to edge-computing".
VMware CEO Raghu Raghuram says of the deal:
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.
Similarly upbeat about the acquisition, Broadcom Software Group's president Tom Krause says:
VMware has long been recognized for its enterprise software leadership, and through this transaction we will provide customers worldwide with the next generation of infrastructure software. VMware's platform and Broadcom's infrastructure software solutions address different but important enterprise needs, and the combined company will be able to serve them more effectively and securely. We have deep respect for VMware's customer focus and innovation track record, and look forward to bringing together our two organizations.