Düsseldorf The price falls in the tech industry are attracting the first buyers. For example, semiconductor manufacturer Broadcom is currently negotiating an acquisition worth about $ 50 billion with cloud provider VMware. This is reported by several US media.
VMware’s stock rose about 20 percent to an overall valuation of $48 billion at the opening of the stock exchange. The acquisition “makes strategic sense,” Wells Fargo analysts assess the deal. “It is in line with Broadcom’s strategy to expand its presence in enterprise infrastructure software.“
VMware generates its current annual revenue of around $ 13 billion with highly specialized software that virtualizes hardware functions such as from servers and manages and simplifies applications in various clouds. The company works closely with Amazon Web Service (AWS), Amazon’s fast-growing cloud subsidiary.
Broadcom is known for its electronics products and chips for iPhones or radio networks. The company, based in California, has grown strongly over the past decades through numerous acquisitions and costs a total of $ 220 billion on the stock exchange.
With VMware, Broadcom wants to secure a foothold in the rapidly growing cloud business. Investors seem skeptical at first: Broadcom’s shares lost a good four percent of their value at the opening of the stock exchange in a positive market environment.
$20 billion for Michael Dell
The acquisition would be the third largest deal in tech history. Just a few months ago, Microsoft bought the video game provider Activision for $ 69 billion, and in 2016 Dell acquired the storage company EMC for $ 67 billion.
As with EMC, Dell founder Michael Dell is also involved in this acquisition. The 57-year-old owns about 40 percent of VWware and is the chairman of the Board of Directors. The software company had come to Dell with the acquisition of EMC. The PC manufacturer split it off half a year ago by share exchange, Dell founder and major shareholder Michael Dell got a large share package.
“The spin-off of VMware creates new opportunities for both Dell and VMware as well as value for our shareholders,” Dell explained the deal in an interview with Handelsblatt a year ago.
Broadcom has already failed several times with takeover attempts
For Broadcom, it is a new start in the acquisition business. The company, formerly based in Singapore, wanted to take over competitor Qualcomm for 117 billion dollars in 2018, but failed due to the veto of then-President Donald Trump.
A takeover attempt in the software business also went wrong in 2021, when Broadcom wanted to take over the provider of analytical business software SAS Institute for up to 20 billion dollars. But the founders of the privately held company in North Carolina changed their mind at the last minute.
Details of the acquisition are expected by market watchers on Thursday, when VMware presents new figures, and a week later, when Broadcom publishes its results.
