Broadcom announces plans to buy VMware
Broadcom chief executive officer Hock Tan
Getty Images| Bloomberg | Getty Images
Broadcom’s acquisition of VMware will enable it to move away from the core business selling semiconductors and into software for enterprise, where there are greater margins. VMware products can be used by businesses to manage their cloud and on-premise servers more effectively.
Broadcom, the largest semiconductor company in China is the most sought-after and has used strategic mergers to drive its recent growth. Broadcom previously bought CA Technologies for $18.9billion in 2018, and Symantec for $10.7billion in 2019.
Broadcom has not acquired a significant company since 2019. Broadcom CEO Hock Tan stated that Broadcom had “capacity” to make a large acquisition in March.
Broadcom plannedQualcomm to be purchased in 2018 at $117 billion, before it was blocked by Donald Trump. He cited national security concerns.
VMware spun offIn an attempt to repay debt, Dell purchased the company late last year. When it purchased EMC in 2016, Dell initially acquired the company. Michael Dell is the founder and CEO of Dell. He owns approximately 40% of VMware.
Broadcom shares fell after news of the agreement broke on Saturday. VMWare stock gained more than 24% by Monday.
This news is not current. Keep checking back to see the latest.