A deal for VMware would rank among the biggest-ever acquisitions of a technology company
Broadcom is in talks to acquire VMware, the cloud-computing company backed by billionaire Michael Dell, setting up a blockbuster tech deal that would vault the chipmaker into a highly specialised area of software. The takeover discussions are ongoing, and there’s no guarantee they will lead to an agreement. People with knowledge of the matter ask not to be identified because the talks are private. VMware currently has a market valuation of about $40 billion. Assuming a typical premium, the potential deal price would be higher, though the terms under consideration couldn’t be learned.
A deal for VMware would rank among the biggest-ever acquisitions of a technology company. In recent months, the industry has been one of the bright spots for bankers, even as the overall pace of dealmaking slows from 2021’s record pace.
The transaction would extend a run of acquisitions for Broadcom Chief Executive Officer Hock Tan, who has built one of the chip industry’s largest and most diversified companies. In recent years, software has been a key focus, with Broadcom buying CA Technologies in 2018 and Symantec Corp.’s enterprise security business in 2019.
Broadcom makes a wide range of electronics, with its products going into everything from the iPhone to industrial equipment. But data centres have become a critical source of growth, and bulking up on software gives the company more ways to target that market. Chipmakers like Broadcom have enjoyed booming sales in recent years, fueled by the spread of semiconductors into more products and the need for work-from-home technology during the pandemic.
