Broadcom to buy cloud services firm VMware in massive $61 billion deal

There is a major acquisition happening in the business of technology as computer chip and software maker Broadcom is all set to buy cloud technology firm VMWare. The deal is estimated to be around $61 billion - making it one of the biggest deals in the current market situation. This will be an even bigger deal than Elon Musk’s proposed move to buy Twitter for around $44 billion. Broadcom is already well known for making computer chips, but this deal will strengthen their position in the cloud computing market as it will allow them to blend public cloud access with internal networks, according to Associated Press.

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The VMware shareholders will be given a choice between $142.50 in cash for each of their shares or 0.2520 shares of Broadcom common stock in exchange of the existing ones. There is also some rebranding expected after the proposed takeover and the company will take over $8 billion of debt.

Broadcom have already started preparation for funding the massive acquisition by speaking to a consortium of banks. The banks will be providing a fully committed debt financing of $32 billion.

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According to a report on Associated Press, 12 per cent of the company will still stay with VMWare shareholders while the deal will include 88 per cent for Broadcom. The deal has already been approved and it is expected to be completed by 2023. This will be a new venture for Broadcom as cloud technology has emerged as a massive market and it will be very good for their diversification.

(With inputs from agencies)