Not just chips, Broadcom is also aiming for the cloud with Vmware
Chip giant Broadcom will buy cloud services company VMware in a $ 61 billion deal. It will be one of the most significant technological operations of all time
Broadcom launches into the cloud with a maxi acquisition.
The US chip giant announced Thursday that it will acquire US cloud service provider VMware in a $ 61 billion cash and stock deal.
This is the chip maker's largest and boldest offer to diversify its enterprise software business, reports Reuters .
The acquisition is the second largest announced globally so far this year, following Microsoft's $ 68.7 billion deal for video game maker Activision Blizzard Inc. The acquisition would further diversify Broadcom's business. , from semiconductors to software.
According toThe Verge , the combination of VMware and Broadcom could be powerful, centered around corporate infrastructure and cloud computing.
In addition, the deal would also be a hit for Dell Technologies Inc CEO Michael Dell. Recall that VMware was spun off from Dell in November 2021. Today the company focuses on cloud computing and virtualization technology But Michael Dell owns a 40% stake in VMware, while the private equity firm Silver Lake owns 10%.
The deal is expected to close in fiscal year 2023.
All the details.
THE BROADCOM OFFER FOR VMWARE
Broadcom's offering price of $ 142.50 per VMware share represents a nearly 49% premium over the stock's last close, when the talks first leaked on May 22.
In one fell swoop, the deal will nearly triple Broadcom's software-related revenue to about 45 percent of its total sales.
THE STRATEGY OF THE AMERICAN CHIP COLOSSUS
The acquisition, backed by $ 32 billion in bank funding, will help transform Broadcom into a diversified technology company ranging from chips to cloud computing services. comments the Ft .
Broadcom's switch to software began after its attempt to acquire mobile chip giant Qualcomm for $ 100 billion was blocked by former US President Donald Trump in 2018 for national security reasons.
Broadcom has since acquired enterprise software company CA Technologies Inc for $ 18.9 billion. In 2019, it acquired Symantec Corp's security division for $ 10.7 billion. Less than 12 months later, he sold Symantec's business to Accenture for an undisclosed sum.
WHAT VMWARE DOES
US company VMware is dominant in the so-called virtualization software market, allowing enterprise customers to run multiple applications on their servers.
This activity has started to slow down as companies have found new tools to operate through cloud computing, prompting VMware to seek out new offerings, including through a partnership with Amazon.com.
THE COMMENT OF THE ANALYSTS
Positive analysts.
“The acquisition of VMware would be considered strategic; consistent with Broadcom's focus on building a software-focused strategy for enterprise infrastructure, ”Wells Fargo analysts said May 23.
“Broadcom will be immediately validated as a major software player with the acquisition of VMware,” says Futurum Research analyst Daniel Newman.
“Having something like VMware… will open a significant number of doors that their current portfolio probably doesn't open for them,” Newman added.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/non-solo-chip-broadcom-punta-anche-al-cloud-con-vmware/ on Fri, 27 May 2022 05:20:05 +0000.