The European Commission has agreed to speed up its review of Broadcom’s acquisition of VMware and to comply with competition law. The first decision may be ready before the end of the year.
Both companies say they are confident that approval from Brussels will help speed up pending processing in Washington, where they are finding some misgivings, although objections are known by their competitors. A price of 61.000 million dollars has been agreed upon, and this purchase will be the second richest deal this year: the first place corresponds to Microsoft, willing to pay 69,000 million to the video game specialist Activision, which Sony has denounced.
The amazing thing about the deal is that semiconductor company buys another software company, what synergies would justify the merger of two different companies? Raghu Raghuram, CEO of this company, benefiting from his attendance at the European conference held in Barcelona earlier this month, answers us.
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hook tan [presidente ejecutivo de Broadcom] On his blog, he explained why he decided to buy VMware. It’s not seeking synergy, even though we obviously have common customers […] In no way was that his motivation. I don’t understand the negative impact a change of ownership could have on our market. Broadcom took a deep look at VMware’s business model and assured us that the strategy would remain consistent.” That must be the case, because the buyer agreed to pay the management team multimillion-dollar bonuses if they remained in their positions after the change of ownership.
VMware has always been a unique case. After its original independence, it went through two changes of ownership—in 2004 EMC, absorbed by Dell in 2015—and in each case obtained guarantees of independence, which its customers value as an identity trait. Raghuram says that won’t change when it becomes Broadcom’s software division, after combining other peripheral assets, such as security firm Symantec. “The official difference – he explains – is that until now VMware was a listed company, with its own board of directors and shareholders, something that will stop happening next year.” As of March, VMware had been independent for a few months after its split from Dell and no takeover bid was known to exist. Ragram spoke about the show multimedia – Who would prefer to call now across the cloud – Based on the special relationship that VMware has been able to establish with the top five service providers Zipper.
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The software catalog expansion this year coincided with uncertainty that didn’t slow the growth rate: $9,635 million billed in the nine months of 2022, a solid increase in recurring revenue and $820 million in net profit.
Raghuram admitted: “Of course we are not immune to macroeconomic factors, but inflation affects us like no one else. […] We are not in a recession, though it could come soon. I have memories of recessions in the past where our customers continued to find value propositions in VMware.”
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