Hook Tan, CEO of Broadcom
Martin H Simon | Bloomberg | Getty Images
Broadcom’s purchase of VMware will help the company diversify away from its core business of designing and selling semiconductors into enterprise software, which can have higher profit margins. Companies use VMware products to run their own servers as well as cloud servers more efficiently.
Broadcom is the most widely acquired semiconductor company and has used mergers to strategically drive its growth in recent years. It previously bought CA Technologies in 2018 for $18.9 billion, and Symantec in 2019 for $10.7 billion.
But Broadcom has not made a major acquisition since 2019. In March, Broadcom CEO Hock Tan said the company had “the ability to make a good-sized acquisition.”
from Broadcom a plan To buy Qualcomm in 2018 for $117 billion before the deal was blocked by then-President Donald Trump, citing national security.
VMware Separated Dell late last year trying to pay off debt. Dell originally acquired the company when it bought EMC in 2016. Michael Dell, CEO and founder of Dell, owns about 40% of VMware.
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