Broadcom (NASDAQ:AVGO) Inc. is on track to finalize its $61 billion acquisition of VMware (NYSE:VMW) Inc., a pioneer in virtualization programs, before the expiration of their merger agreement. This development comes despite potential interruptions from Chinese regulatory authorities, according to a joint communique issued by the firms.
The companies reassured investors that there are no barriers under US merger laws for this deal and that they have met all foreign investment control prerequisites in necessary jurisdictions. The acquisition has received global legal authorization in several countries, but it is still awaiting approval from China.
In the meantime, shareholders have the option to opt for cash or 0.2520 shares of Broadcom stock. The offer represents a 44% premium on VMware's closing price on May 20, 2022, which had dropped below the offer price earlier.
Broadcom's CEO, Hock Tan, plans to integrate VMware into his software portfolio. This move follows Broadcom's previous acquisitions of CA Technologies and Symantec Corp (NASDAQ:GEN).'s corporate security business.
The acquisition of VMware, established in 1998, marks a record-setting transaction for a chipmaker, surpassing Advanced Micro Devices (NASDAQ:AMD) Inc.'s $34.1 billion takeover of Xilinx Inc (NASDAQ:XLNX). This deal was made possible through a go-shop clause and is among notable transactions in 2022 such as Microsoft Corp (NASDAQ:MSFT).'s Activision Blizzard Inc (NASDAQ:ATVI). buyout, Vista Equity Partners' Citrix Systems Inc (NASDAQ:CTXS). purchase, and Elon Musk's acquisition of Twitter Inc (NYSE:TWTR).
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