VMware Can Have More Than Broadcom.
$PHLX Semiconductor Index(.SOX.US$ $Direxion Daily Semiconductor Bull 3x Shares ETF(SOXL.US$ $威睿(VMW.US$ and $Broadcom(AVGO.US$ have entered into an agreement to merge, with the combined entity getting rebranded as VMware. The cash and stock deal values VMware at $61 billion, with VMware shareholders getting the choice to receive $142.4 or 0.252 of the Broadcom common stock. On a pro forma basis, erstwhile Broadcom shareholders will own 88% of the merged entity, and the remaining 12% will be with VMware shareholders.
Rationale For The Merger
Broadcom’s logic to acquire VMware is as follows:
Broadcom’s logic to acquire VMware is as follows:
Broadcom has been moving towards a more software-oriented business model, and VMware appears to be the latest in Broadcom’s aspirational journey towards becoming an enterprise application lifecycle provider.
Broadcom’s confidence in executing the $61 billion deal stems from its experience.
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