Broadcom to acquire VMware for staggering $61B
It's all about diversification...
Today, US-based semiconductor company Broadcom announced it has agreed to acquire cloud computing company VMware for a staggering $61 billion. This could become one of the biggest M&A transactions in the tech sector ever.
VMware specializes in multi-cloud services and pioneered virtualization technology. It’s an iconic brand for sure.
But what is pushing Broadcom to pursue such massive deal? It’s very simple: diversification. The semiconductor industry is very cyclical where technology becomes obsolete fairly quickly. By proposing more product and services Broadcom could alleviate risks (and could also find synergies among offerings within the two entities).
The transaction is expected to be completed in 2023 and is subject to regulatory approvals as well as the approval by VMware shareholders.
I think this positions Broadcom very well. The founder is very good at acquiring and integrating companies.