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Broadcom to buy VMware in $61 billion deal! Check details

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Broadcom

Broadcom Inc, a global technology leader that designs, develops, and supplies semiconductor and infrastructure software solutions, and VMware, a leading innovator in enterprise software, today announced an agreement under which Broadcom will acquire all of the outstanding shares of VMware in a cash-and-stock transaction that values VMware at approximately $61 billion, based on the closing price of Broadcom common stock on May 25, 2022. In addition, Broadcom will assume $8 billion of VMware net debt.

VMware shareholders can choose to receive either $142.50 in cash or 0.2520 shares of Broadcom stock. The offer represents about a 44% premium to VMware’s closing price on May 20. By bringing together the complementary Broadcom Software portfolio with the leading VMware platform, the combined company will provide enterprise customers with an expanded platform of critical infrastructure solutions to accelerate innovation and address the most complex information technology infrastructure needs.

The combined solutions will enable customers, including leaders in all industry verticals, greater choice, and flexibility to build, run, manage, connect and protect applications at scale across diversified, distributed environments, regardless of where they run: from the data center, to any cloud, and to edge-computing. With the combined company’s shared focus on technology innovation and significant research and development expenditures, Broadcom will deliver compelling benefits for customers and partners.

Broadcom posted quarterly adjusted earnings of $9.07 per share, well ahead of consensus estimates of $8.70 per share, according to analysts surveyed by Refinitiv. Revenue grew 23% year over year to $8.1 billion, higher than Wall Street’s expected $7.9 billion, according to Refinitiv. The company gave a revenue outlook for the current quarter that sailed past consensus estimates, guiding for sales of about $8.4 billion. Analysts surveyed by Refinitiv were expecting revenue of just over $8 billion.

Hock Tan, President and Chief Executive Officer of Broadcom, said:

“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. We look forward to VMware’s talented team joining Broadcom, further cultivating a shared culture of innovation and driving even greater value for our combined stakeholders, including both sets of shareholders.”

Raghu Raghuram, Chief Executive Officer of VMware, said:

“VMware has been reshaping the IT landscape for the past 24 years, helping our customers become digital businesses. We stand for innovation and unwavering support of our customers and their most important business operations and now we are extending our commitment to exceptional service and innovation by becoming the new software platform for Broadcom. 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”.

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