Semiconductor company Broadcom is seeking a takeover of VMware. A transaction of which Michael Dell will be the grand arbiter.
If the transaction goes through, it will rank among the largest in recent years for a technology company. Broadcom, one of the major players in the semiconductor industrythese little chips that everyone tears off because they are in all electronic devices, is in talks to seize VMware, a software and cloud company based in Palo Alto, in California. Sources familiar with the matter contacted by Reuters and Bloomberg speak of “discussions which are accelerating”. No comments from the side of the two companies concerned.
Pioneer of Silicon Valley and valued at $40 billion with its virtualization software, VMware has already changed hands several times. In 2004, it was acquired by storage technology giant EMC, which sold part of its stake as part of VMware’s IPO three years later. The business was transferred to Dell Technologies when the IT company acquired EMC in 2016. VMware spun off from Dell last year, but Michael Dell and private equity firm Silver Lake remain top investors in VMwarewith respectively 40% and 11% of the shares of the company.
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This acquisition in the software and cloud sector would reduce Broadcom’s dependence on chips. The transaction would extend a series of acquisitions for Broadcom chief executive Hock Tan, who has built one of the largest and most diverse companies in the industry. Broadcom notably took over CA Technologies in 2018 and IT security company Symantec in 2019.
Broadcom was not long ago in talks to acquire SAS, another software company, but talks ended last year without a deal being reached. Hock Tan was also countered in its biggest takeover bid: a bid for its big competitor, chipmaker Qualcomm. He had to give up this operation in 2018 following resistance from the Trump administration. One of the concerns of the American authorities was Broadcom headquarters, which was located in Singapore. The company has since taken up residence in the United States. It is now based in San Jose, California, about 30 km from VMware headquarters in Palo Alto.