Broadcom Interested in VMware Takeover

According to media reports, Broadcom started talks to buy software group VMware. A deal could be worth more than $50 billion.

The deal is not believed to be imminent but Reuters noted if a purchase materializes it would build on Broadcom’s acquisitions of Symantec’s security division and CA Technologies over the past four years. VMware’s market capitalization was $40.3 billion at the close of trading on 20 May. The cloud computing specialist was spun off from Dell in November 2021.

Financial Times reported Dell founder Michael Dell currently owns about 36% of VMware and also serves as its chairman, while other reports place his stake at around 40%. Former US President Donald Trump killed off an attempt by Broadcom to acquire Qualcomm in 2018, citing national security concerns. FT noted Broadcom president and CEO Hock Tan has been on a hunt for software deals ever since.

Tan told analysts in March that Broadcom had the capacity for a good size acquisition. Wells Fargo analysts said that an acquisition of VMware would be consistent with Broadcom’s focus on building out a deepening enterprise infrastructure software strategy.