U.S. chipmaker Broadcom on Thursday announced a $61 billion deal to buy software firm VMware, marking one of the biggest tech deals of all time and a potentially massive windfall for computer billionaire Michael Dell, VMware’s largest shareholder.
KEY FACTS
- Broadcom will buy VMware in a cash-and-stock deal, the company said.
- The terms of the deal, which has been approved by the boards of both companies, will see Broadcom pay VMware shareholders either $142.50 in cash or 0.2520 Broadcom common stock for each VMware share they hold, based on the stock’s closing price on May 25.
- Broadcom will also assume VMware’s debt of $8 billion, the company said.
- Broadcom said the purchase will help it expand its offerings in cloud computing and business software.
- The deal is expected to be finalized in 2023, subject to approval from regulators and VMware shareholders.
TANGENT
The deal could generate a large windfall for billionaire Michael Dell. Dell, who Forbes estimates has a net worth of $53.4 billion, owns around 40% of VMware.
KEY BACKGROUND
The announcement confirms reports speculating the deal was coming that broke over the weekend. The acquisition is in line with Broadcom’s growth strategy and the company has a history of building itself through major deals, setting up several above $10 billion over the last few years. If finalized, it would be one of the largest tech acquisitions in history, though it does not eclipse Microsoft’s $68.7 billion deal for gamemaker Activision Blizzard in January. The deal would make Broadcom—a computer chip maker—a force in software and cloud computing, where VMware is a major global player.
FURTHER READING
Microsoft Buying Activision Blizzard For Nearly $69 Billion—Will Be 3rd Largest Gaming Company (Forbes)
A VMware Mega-Deal Would Add To Broadcom’s History Of Big-Ticket M&A (Forbes)