The two firms are currently having negotiations, but a deal that could diversify Broadcom’s business further beyond semiconductors and into enterprise software, is not imminent, reported Reuters, citing sources having knowledge of the matter
An office of Broadcom in Cambridge Science Park. (Credit: Cmglee/Wikimedia Commons)
American semiconductor manufacturing company Broadcom is reportedly in discussions to acquire cloud computing and virtualisation technology firm VMware.
Negotiations between the two firms are going on, but a transaction between the two is not imminent, reported Reuters, citing people having knowledge of the matter.
As per the publication, the terms of the potential deal could not be known.
News about the deal was first reported by Bloomberg News on Sunday.
At the close of the market on Friday, VMware’s market capitalisation was $40.3bn.
Based in California, VMware provides multi-cloud services for apps, to enable digital innovation with enterprise control.
Last year, Dell Technologies spun out its stake of 81% in VMware to gain proceeds of $9.3bn. The spin-out enabled the latter to become a standalone company, while simplifying its capital structure and governance model.
Currently, VMware’s biggest investor is Michael Dell with a stake of 40%, as per data from Refinitiv. The company’s second-biggest shareholder as per Refinitiv data is Silver Lake with a 10% stake.
Silver Lake had invested previously in Broadcom.
The acquisition of VMware, if executed, will diversify Broadcom’s business further beyond semiconductors and into enterprise software.
In 2018, the chipmaker acquired business software firm CA Technologies for $18.9bn, and a year later acquired the enterprise security business of Symantec for $10.7bn.
Last July, Broadcom was reportedly in talks to acquire analytics software firm SAS Institute in a deal that could have been valued between $15bn and $20bn. However, the talks failed to result in a deal with SAS Institute reportedly backing out after its owners decided not to sell the company.