Broadcom reported to be in talks to acquire VMware

Broadcom reported to be in talks to acquire VMware

Business diversification cites as reason for interest.

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Chipmaker Broadcom is in talks to acquire cloud service provider VMware, people familiar with the matter told Reuters.

Negotiations between Broadcom and VMware are ongoing and a deal is not imminent, the sources said.

The deal terms under discussion could not be learned.

The acquisition would further diversify Broadcom’s business away from semiconductors and into enterprise software, following its US$18.9 billion acquisition of CA Technologies and its US$10.7 billion purchase of Symantec’s security division in the last four years.

Bloomberg News first reported the deal late on Sunday.

Broadcom and VMware did not immediately respond to Reuters' requests for comment.

As of Friday's market close, the market capitalisation of VMware was US$40.3 billion.

Michael Dell is VMware’s biggest investor with a 40 percent stake as a result of Dell Technologies having spun out VMWare to its shareholders last year, according to Refinitiv data.

Private equity firm Silver Lake, which has previously invested in Broadcom, is VMware’s second-largest shareholder with a 10 percent stake, Refinitiv data shows.

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