Broadcom 'takes' software giant VMware for $61 billion

On the evening of May 26th, Beijing time, Broadcom, a prominent U.S. semiconductor manufacturer, made a significant announcement regarding its acquisition strategy. Broadcom intends to acquire the esteemed cloud computing company VMware through a strategic combination of cash and stock. The estimated total value of this acquisition, based on the closing price of the U.S. stock market on May 25th, stands at approximately $61 billion.

In addition to this substantial acquisition, Broadcom has disclosed its commitment to assume VMware's net debt of $8 billion. This strategic move represents one of the most substantial transactions in the technology sector to date and is positioned as the second-largest global acquisition in 2023, following Microsoft's noteworthy $69 billion acquisition of Activision Blizzard.

Broadcom, established in 1991, stands as a formidable force in the semiconductor industry, with a diverse chip product line ranging from mobile devices to telecommunications networks. Notably, the company has been actively involved in strategic acquisitions. In 2017, Broadcom pursued a $130 billion acquisition of Qualcomm, a semiconductor giant, which was ultimately halted due to regulatory intervention.

Since 2018, Broadcom has strategically shifted its focus towards the software industry, aiming to diversify its business operations and reduce reliance on semiconductor products. In pursuit of this strategy, Broadcom successfully acquired CA Technologies, a cloud computing firm, for $19 billion in 2018. Furthermore, the company invested $10.7 billion to acquire the enterprise security business of Symantec.

As reported by CNBC, this transaction ranks as the third-largest global tech acquisition, following Microsoft's acquisition of Activision Blizzard and Dell's acquisition of EMC. On May 26th, Tongcheng-Elong's stock price experienced a notable 3.5% increase, while VMware's closing price rose by 3.1%.