Broadcom announced the billion-dollar acquisition of VMware
On May 25, Broadcom announced its acquisition of VMware. This is one of the largest technology acquisitions in history, only after the $ 69 billion deal between Microsoft and the game company Activision Blizzard (ongoing), the $ 67 billion deal between Dell and EMC in 2016.
Acquiring VMware will help Broadcom diversify its business, moving from its core business of design and semiconductors to enterprise software, which has higher profit margins. VMware products are being used by enterprises to efficiently run private and cloud servers.
Broadcom is a world-renowned semiconductor company and has frequently “shopped” for other companies as a growth engine in recent years. Previously, this giant bought CA Technologies in 2018 for $18.9 billion and Symantec in 2019 for $10.7 billion. However, since 2019, Broadcom has not made any major acquisitions. In March, CEO Hock Tan said they have the capacity to make a big purchase.
Broadcom wanted to buy Qualcomm in 2018 for $ 116 billion before the plan was blocked by former US President Donald Trump, citing a national security risk. VMware spun off from Dell at the end of 2021. Dell bought VMware when it bought EMC in 2016. Michael Dell, CEO and founder of Dell computers, holds a 40% stake in VMware.
In addition to announcing the acquisition of VMware, Broadcom also reported second-quarter results, which beat investors’ expectations and provided positive third-quarter backup results. Specifically, its revenue increased 23% to $ 8.1 billion. Mr. Tan shared that the server storage and network division performed strongly in the second quarter and will continue to increase in the following quarter.
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