May 31, 2022: -Broadcom has plans to buy VMware in a cash-and-stock transaction in a deal of $61 billion, on the basis of the closing price of Broadcom common stock on May 25, 2022, the companies announced Thursday.

The deal would be one of the most significant technology acquisitions, behind the pending deal of Microsoft $69 billion to buy Activision Blizzard and Dell’s $67 billion purchase of EMC in 2016.

On Thursday, Broadcom’s stock closed up 3.5%, while VMware shares ended up 3.1%.

Suppose Broadcom purchases VMware; it will enable the company to diversify away from its business of designing and selling semiconductors into enterprise software, having bigger margins. Enterprises use VMware’s products to run their servers and cloud servers more efficiently.

Broadcom has been the numerous greedy semiconductor company in recent years and has strategically used mergers to fuel its growth. It had purchased CA Technologies for $18.9 billion in 2018 and Symantec in 2019 for $10.7 billion.

But Broadcom had not completed a significant acquisition since 2019. In March, Broadcom CEO Hock Tan said the firm had the “ability to make a good-sized investment.”

Broadcom bought to purchase Qualcomm in 2018 for $117 billion before the deal was hampered by then-President Donald Trump, citing national security concerns.

Michael Dell, founder, and CEO of Dell, owns approximately 40% of VMware. Dell initially acquired the company when it bought EMC in 2016. VMware turned off from Dell late in the previous year to pay off debt.