Broadcom’s $61B Buy Of ‘Iconic’ VMware: 5 Big Things To Know
From what Dell CEO Michael Dell has to say to a ‘go-shop’ provision in the deal allowing VMware to look for other suitors, here are the five biggest things to know about Broadcom’s historic $61 billion move to acquire VMware.
From Michael Dell To Details Of The $61 Billion Acquisition, Here Are Five Big Things To Know
The IT landscape is being shaken up in one of the largest technology acquisitions in history as Broadcom is set to acquire virtualization pioneer and enterprise software superstar VMware for a whopping $61 billion.
Broadcom President and CEO Hock Tan said the acquisition of the “iconic” company will take his company to new heights with the Broadcom Software Group being rebranded and operated as VMware, which will incorporate Broadcom’s existing infrastructure and security software offerings.
“Building upon our proven track record of successful M&A, this transaction combines our leading semiconductor and infrastructure software businesses with an iconic pioneer and innovator in enterprise software as we reimagine what we can deliver to customers as a leading infrastructure technology company,” said Tan in a statement.
VMware CEO Raghu Raghuram said the company, which he first joined in 2003, has been “reshaping the IT landscape” for the past 24 years by enabling its hundreds of thousands of customers to become digital businesses.
“We stand for innovation and unwavering support of our customers and their most important business operations and now we are extending our commitment to exceptional service and innovation by becoming the new software platform for Broadcom,” said Raghuram in a statement.
Raghuram said combining the assets of Palo Alto, Calif.-based VMware and San Jose, Calif.-based Broadcom, all housed under the VMware brand, will create a “remarkable enterprise software player.”
“Collectively, we will deliver even more choice, value and innovation to customers, enabling them to thrive in this increasingly complex multi-cloud era,” said VMware’s CEO.
In connection with the upcoming $61 billion deal, Broadcom was able to obtain commitments from a consortium of banks for $32 billion in new, fully committed debt financing. Broadcom said it expects to maintain its current dividend policy of delivering 50 percent of its prior fiscal year free cash flow to shareholders.
In addition, Broadcom said it expects to maintain an investment grade rating, given its strong cash flow generation.
“We look forward to VMware’s talented team joining Broadcom, further cultivating a shared culture of innovation and driving even greater value for our combined stakeholders, including both sets of shareholders,” said Broadcom’s CEO.