Broadcom to acquire VMware for $61 billion
Semiconductor design company Broadcom Inc. will acquire all of the outstanding shares in VMware, in a transaction that values the enterprise software company at approximately USD 61 billion.
VMware created the software-defined data center and played a leading role in virtualizing networking and storage, before evolving to become a hybrid cloud and digital workspace leader. Today, VMware's multi-cloud portfolio spans application modernization, cloud management, cloud infrastructure, networking, security and anywhere workspaces.
Following the closing of the transaction, the Broadcom Software Group will rebrand and operate as VMware, incorporating Broadcom's existing infrastructure and security software solutions as part of an expanded VMware portfolio. In addition, Broadcom will assume USD 8 billion of VMware net debt, a press release reads.
"Building upon our proven track record of successful M&A, this transaction combines our leading semiconductor and infrastructure software businesses with an iconic pioneer and innovator in enterprise software as we reimagine what we can deliver to customers as a leading infrastructure technology company," Hock Tan, President and CEO of Broadcom.
The transaction is expected to add approximately USD 8.5 billion of pro forma EBITDA from the acquisition within three years post-closing.
"Combining our assets and talented team with Broadcom's existing enterprise software portfolio, all housed under the VMware brand, creates a remarkable enterprise software player. Collectively, we will deliver even more choice, value and innovation to customers, enabling them to thrive in this increasingly complex multi-cloud era," says Raghu Raghuram, CEO of VMware, in the press release.
Under the terms of the agreement, which has been approved by the boards of directors of both companies, VMware shareholders will elect to receive either USD 142.50 in cash or 0.2520 shares of Broadcom common stock for each VMware share.