Chipmaker Broadcom on Thursday announced an agreement to acquire virtualization giant VMware for roughly $61 billion in cash and stock.
VMware shareholders can receive either $142.50 in cash or 0.2520 shares of Broadcom common stock for each VMware share. Broadcom, which obtained $32 billion in financing from a consortium of banks to help fund the deal, will also assume $8 billion of VMware net debt.
The transaction is expected to be completed in Broadcom’s fiscal year 2023. While the boards of both companies have signed off on the deal, the agreement includes a 40-day “go-shop” period.
After the transaction is completed, Broadcom Software Group will rebrand and operate as VMware, with Broadcom’s infrastructure and security software solutions becoming part of VMware’s portfolio.
On its website, the Broadcom Software Group says its security portfolio is powered by Symantec technology. Broadcom acquired Symantec’s enterprise unit in 2019 for $10.7 billion.
SecurityWeek has reached out to Broadcom for clarifications regarding the migration of Symantec technologies and services to VMware.
VMware’s security portfolio currently includes solutions for security operations centers (SOC), endpoints, cloud environments, applications, and networks. Many of the current products are powered by technology obtained following the acquisition of endpoint security firm Carbon Black for $2.1 billion in 2019.
“VMware has long been recognized for its enterprise software leadership, and through this transaction we will provide customers worldwide with the next generation of infrastructure software. VMware’s platform and Broadcom’s infrastructure software solutions address different but important enterprise needs, and the combined company will be able to serve them more effectively and securely,” said Tom Krause, president of the Broadcom Software Group.
VMware on Thursday published a financial report for the first quarter of fiscal year 2023. The company reported a revenue of $3.09 billion, up 3% from the same quarter of the previous year.
Dell completed a spin-off of its 81% ownership of VMware roughly six months ago.
A study conducted by SecurityWeek showed that of the more than 430 cybersecurity-related mergers and acquisitions announced last year, 11 were billion-dollar-plus deals.