We haven’t stopped at multi-million dollar acquisitions for months, and the latest one was made by largecomwhich has just announced the acquisition of vmware for no less than $61 trillion, making it the third-biggest acquisition in the tech company’s history.
To get into context, largecom is a company that designs, develops, manufactures and supplies semiconductors and infrastructure software, which in 2017 attempted to acquire Qualcomm for $130 billion. For its part, vmware is a Californian company specializing in cloud computing. This company was acquired by Dell (after buying EMC in 2015 for $67 billion) for $625 million in 2004.
Under the terms of the agreement, VMware shareholders will be able to choose between receiving $142.50 in cash or 0.2520 shares of Broadcom common stock for each VMware share. The shareholder election will be on a pro rata basis, which will result in the exchange of approximately 50% of VMware shares for cash and 50% for Broadcom common stock.
Based on the closing price of Broadcom common stock on May 25, 2022, the aggregate consideration of $138.23 per share represents a 44% premium to the closing price of VMware common stock on May 20, 2022. May 2022, the last trading day before rumors of the acquisition began to appear online, and a 32% premium to VMware’s unaffected 30-day volume-weighted average (VWAP) price. Upon closing of the transaction, based on each company’s outstanding shares to date, current Broadcom shareholders will own approximately 88% and current VMware shareholders will own approximately 12% of the combined company on a fully diluted basis.
vmware, a leading multicloud service provider for all applications, pioneered virtualization technology, an innovation that positively transformed x86 server-based computing. Next, VMware created the software-defined data center and played a leading role in network and storage virtualization, before evolving to become a leader in hybrid cloud and the digital workspace. Today, VMware’s multicloud portfolio, spanning application modernization, cloud management, cloud infrastructure, networking, security, and anywhere workspaces, is a flexible and consistent digital foundation on which the largest and fastest growing companies across industries create, run, manage and connect. and protect their largest and most complex workloads for the benefit of their customers.
After the transaction is closed, Broadcom Software Group will change its name and operate as VMwareintegrating Broadcom’s existing infrastructure and security software solutions as part of an extended VMware portfolio.
By combining Broadcom Software’s complementary portfolio with VMware’s industry-leading platform, the combined company will provide enterprise customers with an expanded platform of mission-critical infrastructure solutions to accelerate innovation and meet the most complex IT needs. ‘Informatique infrastructure. The combined solutions will offer customers, including leaders in all verticals, greater choice and flexibility to build, run, manage, connect and secure large-scale applications across diverse and distributed environments, regardless of or their place of execution – from the data core to any cloud and edge computing. Through the combined company’s shared focus on technology innovation and significant research and development expenditures, Broadcom will deliver compelling benefits to its customers and partners.
Hock Tan, Chairman and CEO of Broadcom, said, “Building on our proven track record of successful mergers and acquisitions, this transaction combines our leading semiconductor and infrastructure software businesses with an iconic pioneer and innovator in enterprise software, while reimagining what we can deliver. 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 creating even greater value for our combined stakeholders, including both shareholder groups.
Raghu Raghuram, CEO of VMware, said, “VMware has reshaped the IT landscape over the past 24 years, helping our customers become digital businesses. We stand for innovation and unwavering support for our customers and their operations. extend our commitment to exceptional service and innovation by becoming Broadcom’s new software platform. deliver even more choice, value and innovation to customers, enabling them to thrive in this increasingly complex multi-cloud era.”
Tom Krause, President of Broadcom’s Software Group, said, “VMware has long been recognized for its leadership in enterprise software, and with this transaction, we will provide customers around the world with the next generation of enterprise software. ‘infrastructure. VMware platform and Broadcom infrastructure software solutions meet different but important business needs, and the combined company will be able to serve them more efficiently and securely. We deeply respect VMware’s customer focus and history of innovation, and we look forward to joining our two organizations.
Michael Dell, Chairman of VMware, said, “With Broadcom, VMware will be even better positioned to deliver valuable and innovative solutions to more of the world’s largest enterprises. This is a historic moment for VMware and offers our shareholders and employees the opportunity to participate in a significant raise.”