The acquisition of VMware, Inc. by Broadcom Inc. has been finalized, marking a significant development in the technology industry. This strategic move focuses on strengthening and expanding Broadcom's services to its enterprise customers particularly in the realms of private and hybrid cloud environments.
One of the immediate consequences of this merger is reflected in trading activities. According to an article from Broadcom, trading of VMware's common stock on the New York Stock Exchange (NYSE) will now come to a halt.
From a leadership perspective, there is evident enthusiasm towards this business amalgamation. According to Hock Tan, President and Chief Executive Officer of Broadcom, "We are excited to welcome VMware to Broadcom and bring together our engineering-first, innovation-centric teams as we take another important step forward in building the world's leading infrastructure technology company. With a shared focus on customer success, together we are well positioned to enable global enterprises to embrace private and hybrid cloud environments, making them more secure and resilient. Broadcom has a long track record of investing in the businesses we acquire to drive sustainable growth, and that will continue with VMware for the benefit of the stakeholders we serve."
To better understand what this transaction means for both companies, it is essential to recognize VMware's standing in its field. According to an article from VMware, VMware stands as a foremost provider of multi-cloud services for all applications, fostering digital innovation while maintaining enterprise control. Serving as a reliable foundation to expedite innovation, VMware's software affords businesses the flexibility and options required to shape the future. With headquarters in Palo Alto, California, VMware is dedicated to advancing a better future through its 2030 Agenda.
In terms of regulatory compliance related with such transactions there have been significant developments. In relation to the proposed transaction, Broadcom has submitted a registration statement on Form S-4 to the SEC, serving as both a proxy statement for VMware and a prospectus for Broadcom. Both Broadcom and VMware may file additional pertinent documents with the SEC concerning the proposed transaction. The SEC declared the registration statement effective on October 3, 2022, and the definitive proxy statement/prospectus has been sent to VMware shareholders. It's important to note that this document does not replace the proxy statement/prospectus, registration statement, or any other documents that Broadcom or VMware may file with the SEC.
When considering this acquisition in the broader context of global business trends, it stands out in terms of its scale. According to an article from Reuters, this acquisition stands as the second-largest globally announced this year, surpassed only by Microsoft Corp's $68.7 billion agreement to acquire video game maker Activision Blizzard Inc. The proposed deal offers $142.50 in cash or 0.2520 of a Broadcom share for each VMware stock, presenting an almost 49% premium to the stock's closing value before initial reports on May 22. Additionally, Broadcom will undertake $8 billion of VMware's net debt. Following this announcement, Broadcom's shares increased by 3.5%, while VMware experienced a 3.1% rise.