Broadcom to buy VMware in $61bn deal
By Michele Maatouk
Date: Thursday 26 May 2022
(Sharecast News) - US chipmaker Broadcom said on Thursday that it has agreed to buy VMware in a $61bn cash and share deal.
Under the terms of the transaction, VMware shareholders will elect to receive either $142.50 in cash or 0.2520 shares of Broadcom common stock for each of their shares. The shareholder election will be subject to proration, resulting in around 50% of VMware's shares being exchanged for cash and 50% being exchanged for Broadcom shares.
The consideration represents a 44% premium to the closing share price of VMware on 20 May, which was the last trading day before media speculation about a possible deal emerged.
Broadcom president and chief executive Hock Tan 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."
Broadcom said the deal is expected to add around $8.5bn of pro forma EBITDA from the acquisition within three years after closing.
VMware is a provider of multi-cloud services for all apps, enabling digital innovation with enterprise control.
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