May 26 (Reuters) – Broadcom announced on Thursday that it has acquired cloud computing services provider VMware for $61 billion (56.9 billion euros) in a cash and stock deal. US semiconductor maker’s biggest foray into professional software.
The operation, if successful, would be the second largest acquisition globally since the beginning of the year after the acquisition in January for $ 68.7 billion of video game designer Activision Blizzard by Microsoft.
Broadcom’s offer of $142.50 per VMware share is about a 49% premium to the May 20 close, just before reports of talks between the two groups began circulating in the press.
VMware shareholders will be able to choose to receive either this sum in cash or 0.2520 shares of Broadcom common stock for each security of the software company they hold.
In pre-opening trading on Wall Street, Broadcom shares fell around 1% while VMware gained 1.3%, having already risen sharply since the first rumors emerged on the market. this possible takeover.
This acquisition would almost triple the turnover of Broadcom’s software activities, a branch which would then represent nearly 45% of its total sales.
For Daniel Newman, analyst at Futurum Research, Broadcom “will be immediately recognized as a major player in software” with the acquisition of VMware.
“Having a company like VMware, which is well established, will open up [pour Broadcom] a significant number of doors that are likely closed to him with his current portfolio,” the analyst added.
The agreement is also a godsend for the general manager of Dell Technologies, Michael Dell, several months after the effective split between VMware and the IT group, its parent company.
Michael Dell owns a 40% equity stake in VMWare and private equity fund Silver Lake 10%.
As part of the agreement, VMware is allowed to solicit other potential acquirers for 40 days.
After a failed hostile bid for rival Qualcomm in 2018, Broadcom has shown increased interest in the software space by snapping up CA Technologies for $18.9 billion and cybersecurity firm Symantec for $18.9 billion. 10.7 billion.
The group also considered acquiring analytics software company SAS but did not proceed.
VMware dominates the market for so-called virtualization software, which allows customers to run multiple applications on their servers. (Reporting Chavi Mehta in Bangalore, Krystal Hu in New York and Jane Lanhee Lee in San Francisco; French version Laetitia Volga, editing by Bertrand Boucey)