Cloud Computing Giant VMWare Sold For Rs 4.6 Lakh Crore: Broadcom’s Biggest, Globally 2nd Biggest Deal Of 2022
VMware Inc, which provides scalable and power-featured cloud infrastructure and business mobility solutions, will now be acquired by Broadcom Inc in a $61 billion cash and stock deal. This is the company’s biggest move in its diversifying plan till date!
Globally, this is the second largest acquisition, just behind Microsoft Corp’s $68.7 billion deal to buy video game maker Activision Blizzard Inc.
VMware To Be Acquired By Broadcom For $61 Billion Deal
The company is diversifying its business into the enterprise software, and Broadcom will also assume $8 billion of VMware’s net debt.
The offer of $142.50 in cash or 0.2520 of a Broadcom share for each VMware stock represents a premium of around 49% to the stock’s last close before the talks of deal.
As per reports, Broadcom’s shares closed up 3.5% and VMware rose by 3.1%
Broadcom Chief Executive Hock Tan has made the company one of the world’s buggest chipmakers through this acquisition, and is also bringing his dealmaking playbook to the software industry.
This will also boost Broadcom’s software-related revenue by three times to about 45% of its total sales.
Broadcom Already Received Commitments From Banks
As per reports, Broadcom has already received commitments from a consortium of banks for $32 billion in debt funding. VMware will be permitted to solicit offers from rival bidders for 40 days as part of the agreement. The latter has said that the offer was unsolicited.
However, if VMware does not go with Broadcom and opts for another offer, it will have to pay Broadcom $1.5 billion as breakup fee. Additionally, if it picks another offer before the aforementioned 40 days, a termination free of $750 million must be paid.
VMware has previously been in the news for reducing the salaries of employees who have decided to work from home permanently and relocated to cities that are easy on the pocket. The reduction in their pay can be as much as 18%.
Even if the employee chooses to relocate within California, they will get their salaries slashed. As per reports, if the employees choose to relocate to San Diego or Los Angeles will have an 8% cut in their salary.