Broadcom to Buy VMware in a $69 Billion Mega-Deal

Broadcom agreed to acquire cloud software company VMware in one of the largest US technology acquisitions to date. A $69 billion deal is the part of chip maker's ongoing strategy to transform its business.

Broadcom announced in a statement that the proposed acquisition values VMware at approximately $61 billion based on the closing price of its stock on 25 May, and includes $8 billion in net debt. The transaction is backed by $32 billion in bank financing and Broadcom expects to close in its fiscal 2023, which runs to end-October 2023, subject to regulatory approval and customary closing conditions.

Broadcom’s planned $69 billion outlay puts the deal on par with Microsoft’s pending purchase of Activision Blizzard and just behind Dell’s buy of EMC in 2016. The chip company pushed into software in 2019, agreeing to buy Symantec for $10.7 billion. It has seemingly had enough cash since an attempt to buy Qualcomm was blocked in 2018 over national security concerns.

The announcement of the deal comes days after reports Broadcom had commenced talks to buy VMware. The $61 billion price represents a 33% premium on the value of the software group since the news of the talks emerged. Broadcom stated once the transaction closes, its Broadcom Software Group would rebrand and operate as VMware, incorporating its existing infrastructure and security software products as part of the expanded portfolio.