Broadcom will buy VMware in a cash-and-stock transaction valued at $61 billion, based on the closing price of Broadcom common stock on May 25, 2022, the companies announced on Thursday.
The deal would be one of the largest technology acquisitions of all time, behind Microsoft’s pending $69 billion deal to purchase Activision Blizzard and Dell’s $67 billion purchase of EMC in 2016.
Broadcom’s purchase of VMware will help the company diversify away from its core business of designing and selling semiconductors into enterprise software, which can have larger margins. VMware’s products are used by enterprises to more efficiently run their own servers as well as cloud servers.
Broadcom is the most acquisitive semiconductor company and has strategically used mergers to fuel its growth in recent years. It previously purchased CA Technologies in 2018 for $18.9 billion and Symantec in 2019 for $10.7 billion.
The company has been a frequent target of antitrust scrutiny, incluiding complaints of forcing exclusivity agreements and questioning other attempted acquisitions.
But Broadcom had not made a large acquisition since 2019. In March, Broadcom CEO Hock Tan said the company had the “capacity to do a good-sized acquisition.”
Broadcom planned to purchase Qualcomm in 2018 for $117 billion before the deal was hampered by then-President Donald Trump, who cited national security concerns.
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