Broadcom is reportedly in talks to buy VMware

According to multiple reports on Sunday night, chip maker Broadcom Inc. Enterprise cloud-computing company VMware Inc. 6 are under discussion for purchase

Bloomberg News, Reuters, New York Times and Wall Street Journal reported ongoing discussions but did not mention purchase prices; Until Friday, VMware VMW,
+ 0.80%
The market cap was about $ 40.3 billion, with Broadcom valued at about $ 222 billion.

The report states that negotiations are ongoing, and no agreement has been reached.

Broadcom AVGO, based in San Jose, California
Has been known to seek a major software acquisition for some time; The last big deal was in 2019 at Symantec Corp. Its enterprise security business purchased about $ 11 billion. Broadcom acquired Brocade Communications 2016 5.9 billion in 2016 and CA Inc. Who bought about $ 18 billion in 2018.

“M&A has played a central role in Broadcom’s growth strategy and this transaction represents the next logical step in our strategy,” said Broadcom CEO Hawk Tan after the 2019 Symantec deal.

Broadcom topped Wall Street estimates when it reported first-quarter earnings in March. The company will report second-quarter earnings on June 2.

Last year, Dell Technologies Inc. DELL,
Eventually VMware closed most of its stake. In its latest earnings report in February, California-based VMware Palo Alto exceeded earnings expectations but lowered its outlook for the current quarter. It is scheduled to report first-quarter earnings on Thursday.

Broadcom shares have fallen 18% to date, while VMware is down 17%, roughly consistent with the SPX of the S&P 500,
+ 0.01%
This year it has dropped 18%.

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