Latest News

Broadcom, VMware deal could be announced by Thursday, sources say

0

In this article

AVGO

VMW

DELL

Rangarajan Raghuram, CEO, VMware at the NYSE, Dec. 14, 2021.
Source: NYSE

CNBC’s David Faber reported Monday that Broadcom had been gearing up to announce its acquisition of VMware as soon as Thursday, but the news could come sooner after several reports said the two companies were in talks.

Some material terms still need to be finalized, and a deal could fall through, Faber said on CNBC’s “Squawk on the Street.” It would be a cash-and-stock offer if it materializes, according to sources familiar with the deal. Michael Dell owns about 40% of VMware.

Shares of VMware surged 18% early Monday. The chipmaker, meanwhile, slid 4%. Bloomberg first reported on Sunday the two companies are in talks.

A deal for VMWare, which had a $40.3 billion market cap as of Friday’s market close, would rank among the biggest acquisitions in the tech sector, behind Microsoft’s nearly $69 billion of Activision Blizzard and Dell’s $67 billion EMC purchase in 2016.

The move could help Broadcom further diversify its business away from semiconductors into enterprise software, which has been a key focus. It would follow its acquisitions of CA Technologies in 2018 for $18.9 billion and Symantec in 2019 for $10.7 billion.

“In particular, they look for sticky, mission-critical enterprise software with a key focus on large Fortune 500 customers. And recent software stock declines may make such deals easier
now,” AB Bernstein analysts said in a Monday note to investors.

— CNBC’s Michael Bloom contributed to this report.

Subscribe to CNBC on YouTube.

EBay is entering the NFT business, with an assist from hockey legend Wayne Gretzky

Previous article

Bitcoin could fall to $8,000, a more than 70% plunge, Guggenheim’s Minerd says

Next article

You may also like

Comments

Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News