Broadcom will purchase VMware in a cash-and-stock transaction at $61 billion, based on the closing cost of Broadcom common stock on 25th May, the companies announced yesterday.
The deal would be one of the biggest technology purchases of all time, behind Microsoft’s pending $69 billion deal to buy Activision Blizzard and Dell’s $67 billion buy of EMC in 2016.
Broadcom’s stock ended up 3.5% yesterday, while VMware shares closed the day up 3.1%.
Broadcom’s purchase of VMware will benefit the company diversify away from its business of designing and selling semiconductors to enterprise software.
Broadcom semiconductor company has deliberately used mergers to increase its growth in the last years. It previously acquired CA Technologies in 2018 in a deal of $18.9 billion and it purchased Symantec in 2019 in a deal of $10.7 billion.
Broadcom had not made a huge purchase since 2019. In March, the CEO of Broadcom Hock Tan said, “the company has the capacity to do a good-sized acquisition.”