Broadcom, a chip manufacturer, buys cloud- and virtualization-focused software developer VMware for the amount equivalent of 61 billion USD in cash and stock, engadget reports.
As a result of the deal, Broadcom's software division will be folded into VMware to create a powerhouse that helps companies run apps in all sorts of environments, including "any" cloud service.
The proposed union would have Broadcom take on $8 billion of VMware's debt. The deal should close sometime in Broadcom's fiscal 2023 (no later than early calendar 2023) if regulators approve the deal.
VMware isn't yet locked into the merger — a "go-shop" clause will let it consider and even solicit deals from other companies through July 5th.
If the deal develops as planned, we will witness one of the largest tech acquisitions to date.
In 2015, Dell set a record when it bought VMware's then-owner EMC for $67 billion. The company held its record for a few years. Microsoft then pushed Dell off the pedestal with its $68.7 billion buyout of Activision Blizzard (still pending).
VMware has seen declining profits and modest revenue gains. This could help the firm overcome those hurdles and help its competitiveness.
Interestingly, former President Trump blocked Broadcom's purchase of Qualcomm in 2018 over national security concerns.