Broadcom will buy VMware in a cash-and-stock transaction valued at $61 billion, the two companies announced Thursday.
Semiconductor heavyweight Broadcom has agreed to buy software virtualization leader VMware in a $61 billion deal that will put the chipmaker between cash and stock.
The deal would be one of the biggest tech acquisitions of all time, behind Microsoft ‘s pending $69 billion deal to buy Activision Blizzard and EMC’s $67 billion purchase of Dell in 2016.
VMware CEO Raghu Raghuram and Broadcom CEO Hock Tan released the deal ahead of VMware ‘s earnings announcement on Thursday morning. “VMware has been reshaping the IT landscape for the past 24 years, helping our customers become digital businesses,” Raghuram said in a statement.
“Combining our assets and talented team with Broadcom’s existing enterprise software portfolio, all hosted under the VMware brand, creates a leading enterprise software player. Together, we will deliver even more choice, value and innovation to customers, enabling them to thrive in this increasingly complex multi-cloud era,” added Raghuram.
Acquisitions of technology companies
Broadcom ‘s purchase of VMware will help the company diversify beyond its core business of designing and selling semiconductors into enterprise software, with a view to earning higher margins.
Businesses use VMware products to more efficiently run their own servers and cloud servers .
Broadcom is the most acquisitive semiconductor company and has strategically used mergers to fuel its growth in recent years. It previously bought CA Techologies in 2018 for $18.9 billion and Symatec in 2019 for $10.7 billion .
Additionally, Broadcom tried to buy Qualcomm in 2018 for $117 billion before the deal was stymied by former US President Donald Trump, who cited national security concerns.