In a statement outlining the terms and conditions of the deal, the company said the Broadcom Software Group will be renamed VMware, and their software portfolios will effectively be merged.
It’s one of the biggest tech acquisitions ever, behind Dell’s US$67bn EMC deal and Microsoft’s pending acquisition of Activision Blizzard for US$68.7bn. Broadcom is known for its chip business, designing and manufacturing semiconductors for modems, Wi-Fi, and Bluetooth chips across multiple devices.
Hock Tan, President and Chief Executive Officer of Broadcom, said, "Building upon our proven track record of successful M&A, this transaction combines our leading semiconductor and infrastructure software businesses with an iconic pioneer and innovator in enterprise software as we reimagine what we can deliver to 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 driving even greater value for our combined stakeholders, including both sets of shareholders."
Creating technology for the cloud
A provider of multi-cloud services, VMware’s portfolio spans application modernisation, cloud management, cloud infrastructure, networking and security.
Raghu Raghuram, Chief Executive Officer of VMware, said, "VMware has been reshaping the IT landscape for the past 24 years, helping our customers become digital businesses. We stand for innovation and unwavering support of our customers and their most important business operations and now we are extending our commitment to exceptional service and innovation by becoming the new software platform for Broadcom. Combining our assets and talented team with Broadcom's existing enterprise software portfolio, all housed under the VMware brand, creates a remarkable enterprise software player. Collectively, we will deliver even more choice, value and innovation to customers, enabling them to thrive in this increasingly complex multi-cloud era."
Providing customers with improved technology and an expanded portfolio
Bringing together Broadcom Software portfolio along with the VMware platform, will provide enterprise customers an expanded platform of critical infrastructure solutions to accelerate innovation and address complex technology infrastructure needs.
The combined solutions will enable customers, greater choice and flexibility to build, run, manage, connect and protect applications at scale across diversified, distributed environments, regardless of where they run: from the data centre, to any cloud and to edge-computing. With the combined company's shared focus on technology innovation and significant research and development expenditures, Broadcom will deliver compelling benefits for customers and partners, according to the company.
The deal, which Broadcom hopes to complete before the end of 2022 to fold into its 2023 financial year, will see the company take on an additional US$8bn of VMware debt.