The tech companies are discussing a cash-and-stock deal that could come soon!
Broadcom Inc. is in advanced talks to buy VMware Inc. according to people familiar with the matter, Bloomberg reports.
VMware has a market value of $40 billion, while Broadcom’s is around $222 billion.
The discussions, comes roughly six months after computing pioneer Dell Technologies Inc. spun off its 81% equity stake in VMware.
*Bloomberg tweet on Braodcom talks w/VMware
Broadcom Said to Be in Talks to Acquire Cloud Company VMware https://t.co/jL0Zed5g1I
— Bloomberg (@business) May 23, 2022
VMware has a strong position in the market for “hybrid” cloud, where large companies mix public cloud services (like those of Amazon.co and Microsoft Corp) with their own private networks.
Broadcom, a semiconductor powerhouse, has been on the hunt for a deal to boost up its corporate-software market.
The demand for cloud computing, that primarily enables customers to rent computing horsepower rather than invest in their own, has skyrocketed recently.
Startups and other businesses that couldn’t support in-house IT departments were among the earliest cloud adopters, but now companies across nearly every industry rely on cloud services.
- VMware became part of Dell when the latter bought EMC in 2016.
Dell paid $67 billion for the acquisition of EMC. The deal ranks as the tech industry’s single most expensive acquisition to this day
Dell completed the spinoff of its VMware stake in November.
VMware shareholders, including Dell, got an $11.5 billion cash dividend. Dell used the funds to pay down debt and said the deal positioned it to grow in new markets