Broadcom offers $61 billion for VMware


Broadcom has tabled a $61 billion cash and stock proposal that would see it take control of 88% of VMware stock, with current shareholders retaining a 12% stake.

Michael Dell, which owns 40% of VMware, and private equity firm Silver Lake, which controls 10%, are backing the deal, which would also see Broadcom take over $8 billion in debt from VMware.

If the transaction closes, Broadcom says its current software development division, which includes infrastructure operations and security software, would be rebranded and operated as VMware.

“Combining our assets and talented team with Broadcom’s existing enterprise software portfolio, all housed under the VMware brand, creates a standout player in the enterprise software space,” said Raghu Raghuram, CEO from VMware.

“Collectively, we will deliver even more choice, value and innovation to customers, enabling them to thrive in this increasingly complex multicloud era.”

The deal is expected to close in fiscal 2023, and Broadcom has lined up $32 billion in new debt to complete it.

The terms of the deal give VMware 40 days to seek a better deal.

At the same time, Broadcom announced its second quarter results and reported net income of $2.6 billion on a GAAP basis from $8.1 million in net revenue, respectively increases 23% and 173% year-on-year.

The vast majority of revenue, $6.2 billion, was attributed to its semiconductor division, with the remainder coming from its software arm which grew 23%.

In 2019 Broadcom bought Symantec’s enterprise security business for $10.7 billion, and in 2020 sold. Symantec’s cybersecurity services business to Accenture.

At the end of 2021, Dell Technologies completed the spin-off from VMware. VMware was founded in 1998, acquired by EMC in 2004, and was later acquired by Dell in 2016.


Source: “ZDNet.com”





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