Broadcom is reportedly working to acquire VMware

Silicon chip maker Broadcom is working on a cloud acquisition deal and virtualization provider VMware, although no agreement is expected to be inevitable, according to published reports.

VMware’s market capitalization is about $ 40 billion, although the proposed purchase price has not yet been revealed. If a deal is finally reached, it would be the latest in a long series of acquisitions for Broadcom, built largely on multiple high-profile buyouts.

The company acquired broadcaster Brocade in November 2016 for nearly $ 6 billion, security development and software firm CA Technologies in November 2018 for $ 19 billion and Symantec’s corporate security division in August 2019 for more than $ 10 billion.

However, the most aggressive acquisition of Broadcom was rejected by the Trump administration in 2017 due to alleged national security problems when it tried to buy a fellow chipmaker Qualcomm in a deal that would cost a whopping $ 117 billion.

Shares of Broadcom fell slightly in pre-market trading, while those of VMware rose – the latter rose by about 18% on Monday morning to $ 113, while the former fell by about 5% to $ 518.

Broadcom may need to offer a significant premium on the current share price of VMware to impose a deal, according to Bloomberg analysiswho noted that 40% of VMware shares are still owned by Michael Dell, head of the company’s former corporate parent, Dell Technologies, after the company was spun off from Dell in November 2021 – and other potential buyers may be appear now that the word is known that VMware can be sold.