In 2021, Broadcom, a global leader in infrastructure technology solutions, announced its intention to acquire VMware, a leading software company that provides cloud computing and virtualization software and services. In this blog, we will take a closer look at the acquisition from Broadcom of VMWare in detail.
The Acquisition
The acquisition of VMWare by Broadcom is an all-cash deal worth $12.7 billion, which represents a significant premium to the current market value of VMWare. The acquisition is subject to regulatory approval and is expected to be completed in the second half of 2021.
Benefits of the Acquisition
The acquisition of VMWare will enable Broadcom to expand its footprint in the fast-growing software and cloud computing markets. Broadcom already has a strong presence in the semiconductor and networking industries, and the acquisition of VMWare will allow the company to diversify its business and tap into new markets.
VMWare is a market leader in virtualization and cloud computing software and services, which will complement Broadcom’s existing portfolio of infrastructure technology solutions. The acquisition will also allow Broadcom to provide a more comprehensive set of solutions to its customers, helping them to drive innovation and growth.
Costs of the Acquisition
The acquisition of VMWare will cost Broadcom $12.7 billion, which represents a significant investment. The company plans to finance the acquisition through a combination of cash on hand and new debt.
In addition to the purchase price, there will be other costs associated with the acquisition, including legal and advisory fees. These costs are expected to be in the millions of dollars.
Conclusion
The acquisition from Broadcom of VMWare is a significant move for both companies, and it is expected to have a positive impact on their business operations. By acquiring VMWare, Broadcom will be able to diversify its business and tap into new markets. VMWare’s expertise in virtualization and cloud computing software and services will complement Broadcom’s existing infrastructure technology solutions, providing a more comprehensive set of solutions to customers. While the acquisition will come at a significant cost, Broadcom is well-positioned to finance the deal and capitalize on the opportunities it presents.
