Tuesday, June 28, 2022

Broadcom acquires VMware – it’s official

Broadcom announced in a press release earlier today that it will acquire VMware for approximately US$61 billion in cash and stock. The company touted this as a “strategy to build the world’s leading infrastructure technology company.”

As announced previously, the existing Broadcom Software Group will be rebranded as VMware and merge Broadcom’s enterprise infrastructure and security products with VMware’s virtualization software.

Tom Krause, president of the Broadcom Software Group, paid tribute to VMware in the company announcement, noting, “VMware has long been recognized for its enterprise software leadership, and through this transaction we will provide customers worldwide with the next generation of infrastructure software.”

Krause further notes that he sees a strong synergy and little overlap between the two companies. He states, “VMware’s platform and Broadcom’s infrastructure software solutions address different but important enterprise needs, and the combined company will be able to serve them more effectively and securely. We have deep respect for VMware’s customer focus and innovation track record and look forward to bringing together our two organizations.”

Michael Dell, chairman of the VMware Board, endorsed the deal earlier this week, subject to VMware board approval. In today’s announcement he stated, “Together with Broadcom, VMware will be even better positioned to deliver valuable, innovative solutions to even more of the world’s largest enterprises.

On closing, current Broadcom shareholders will own approximately 88 per cent and current VMware shareholders will own approximately 12 per cent of the combined company.

The sale is expected to be completed in Broadcom’s fiscal year 2023, but is subject to regulatory approvals and other customary closing conditions, including approval by VMware shareholders.

The merger agreement provides for a “go-shop” provision under which VMware and its Board of Directors may “actively solicit, receive, evaluate and potentially enter negotiations with parties that offer alternative proposals during a 40-day period following the execution date of the definitive agreement.”

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Jim Love, Chief Content Officer, IT World Canada

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Jim Love
Jim Lovehttp://www.changethegame.ca
I've been in IT and business for over 30 years. I worked my way up, literally from the mail room and I've done every job from mail clerk to CEO. Today I'm CIO and Chief Digital Officer of IT World Canada - Canada's leader in ICT publishing and digital marketing.

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