Broadcom made official its plan to acquire VMware in a cash-and-stock deal worth around $61 billion. The deal underscores the degree to which CEO Hock Tan has transformed Broadcom from a maker of networking chips into a formidable player in enterprise software.
The agreement includes a “go-shop” provision allowing VMware to solicit bids from other companies until July 5. But Broadcom is paying a rich premium, which may dissuade other bidders. The deal works out to about $138 per VMware share, about 44% above where VMware was trading before word of the deal leaked last weekend. And VMware was starting from a relatively higher base: Its shares were down 18% this year through last Friday, compared with a 28% decline for the Nasdaq.