Sunday, December 3, 2023

Broadcom is acquiring VMware for $61 billion

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Broadcom acquires VMware in a $ 61 billion cash-and-stock agreement. It’s one of the biggest tech acquisitions ever, behind Dell’s $ 67 billion EMC deal and Microsoft’s pending acquisition of Activision Blizzard for $ 68.7 billion. Broadcom is known for its chip business, designing and manufacturing semiconductors for modems, Wi-Fi, and Bluetooth chips across several devices.

This giant acquisition for VMware is designed to accelerate Broadcom’s software business. VMware, which was owned by Dell until it was split last year, focuses on cloud computing and virtualization technology. If you’ve been using a virtual machine at work for the past decade, it’s probably powered by VMware or its competitor Citrix. Devices from Apple, Google, and more use Broadcom chips, and it’s likely that the devices you’ve used Wi-Fi or Bluetooth with have probably been powered by Broadcom chips at some point in the Internet chain.

Broadcom interconnect chip.
Image: Broadcom

The combination of VMware and Broadcom could be powerful, focused on enterprise infrastructure and cloud computing. Broadcom before acquired CA Technologiessecurity and database software makers, up from $ 18.9 billion in 2018, and even acquired Symantec’s enterprise security unit for $ 10.7 billion in 2019. Less than 12 months later, it sold the Symantec business to Accenture for an unknown amount.

Broadcom now plans to rebrand its Broadcom Software Group to VMware and incorporate its existing infrastructure and security software offerings as part of VMware. “Combining our assets and talented team with Broadcom’s existing enterprise software, all contained under the VMware brand, creates a remarkable enterprise software player,” says Raghu Raghuram, CEO of VMware.

The deal, which is expected to close in the fiscal year of Broadcom 2023, has the backing of Michael Dell, who along with Silver Lake owns about 50 percent of VMware. If the deal closes, it will be one of the biggest tech deals of all time. Broadcom previously failed to buy rival chip maker Qualcomm for more than $ 100 billion after the Trump administration blocked the deal, citing national security concerns.


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