Broadcom (Broadcom) (AVGO-US) announced Thursday (26) that it will acquire VMware (VMW-US)。
The deal is second only to Microsoft (MSFT-US) to acquire Activision Blizzard for $69 billion (ATVI-US) and Dell (DELL-US) acquired EMC for $67 billion in 2016.
Broadcom’s acquisition of VMware will help the company move from its core business of designing and selling semiconductors to enterprise software and generate greater profits. Enterprises use VMware products to operate their own servers and cloud servers more efficiently.
Broadcom has strategically used mergers to drive its growth in recent years. It previously acquired CA Technologies in 2018 for $18.9 billion and Symantec in 2019 for $10.7 billion.
However, Broadcom has not made another major acquisition since 2019. Broadcom Chief Executive Hock Tan said in March that the company was “capable of making large-scale acquisitions.”
Broadcom was interested in acquiring Qualcomm for $117 billion in 2018 (QCOM-US), but then-President Trump blocked the deal on national security grounds.
VMware spun off from Dell late last year to pay down debt. Dell initially acquired the company when it acquired EMC in 2016. Dell CEO and founder Dell (Michael Dell) owns about 40% of VMware.
News of the deal broke over the weekend, sending Broadcom shares lower. VMWare shares rose more than 24% on Monday (23rd).