Broadcom signs acquisition of VMware for $ 61 billion

Broadcom has agreed to acquire VMware for a transaction worth approximately $ 61 billion.

With this acquisition, the chip maker giant will acquire all of VMware’s outstanding shares in cash and stock transactions.

Transaction reports surfaced Earlier this week And confirmed by both companies in a statement on Thursday.

One of the biggest acquisitions that impacts the channel Since Dell acquired EMC for $ 67 billion in 2016.

Raghu Raghuram, VMware’s Chief Executive Officer, said: By becoming Broadcom’s new software platform, we are expanding our commitment to outstanding service and innovation.

“Combining our assets and competent teams with Broadcom’s existing enterprise software portfolio, all housed under the VMware brand, creates great enterprise software players. Collectively, more options for our customers. , Providing value, innovation and enabling our customers to become more and more successful. A complex multi-cloud era. “

The transaction, which is scheduled to close in Broadcom’s fiscal year 2023, is subject to receipt of other customary closing conditions, including regulatory approval and approval by VMware shareholders.

After signing the agreement, Broadcom Software Group will rebrand and operate as VMware, incorporating Broadcom’s existing infrastructure and security software solutions as part of its expanded VMware portfolio.

Read more-VMware partners have different feelings about dealing with Broadcom

Hock Tan, President and Chief Executive Officer of Broadcom, said: To customers as a major infrastructure technology company.

“We look forward to joining Broadcom with a talented team of VMware to further foster a shared culture of innovation.”

What are the trading terms?

This agreement was unanimously approved by the boards of directors of both companies.

VMware shareholders choose to receive $ 142.50 in cash or 0.2520 Broadcom common stock per share of VMware.

Shareholder elections are subject to apportionment, resulting in approximately 50% of VMware’s shares being exchanged for cash consideration and 50% of Broadcom’s common stock.

Broadcom, on the other hand, will acquire all of VMware’s outstanding shares through cash and equity transactions. VMware is worth about $ 61 billion.

Chipmakers will also underwrite $ 8 billion in VMware net debt.

Based on the closing price of Broadcom common stock on May 25, a total consideration of $ 138.23 per share is equivalent to a 44% premium on the closing price of VMware common stock on May 20.

VMware’s Board Chairman and Dell CEO Michael Dell and Silver Lake own 40.2% and 10% of VMware’s outstanding shares to vote in favor of the transaction as long as the VMware Board continues to recommend the proposed transaction. Signed a support contract for. Broadcom.

Dell states: “VMware will be working with Broadcom to deliver valuable and innovative solutions to more of the world’s largest companies. This is a milestone for VMware and meaningful to shareholders and employees. We will provide you with the opportunity to participate in profits. “

The transaction is expected to add approximately $ 8.5 billion in proforma EBITDA within three years of the acquisition. Broadcom signs acquisition of VMware for $ 61 billion

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