Broadcom in Advanced Talks to Acquire VMware Inc

According to sources, Broadcom Inc. is in advanced discussions about buying VMware Inc. which will be one of the biggest deals of the year. The tech companies are discussing cash and stock deal that may take place soon, assuming the negotiations won't collapse. VMware has a market value of $40 billion, while Broadcom has a market value of about $222 billion.

The recent gaining momentum in the deal will take place approximately six months after computing pioneer Dell Technologies Inc. spins off an 81%  stake in VMware.

VMware has a strong position in the "hybrid" cloud market where large companies use public cloud services such as those offered by Amazon.com Inc. and Microsoft Corp. 

Broadcom has been looking for a deal to expand its presence in the corporate software market. It almost acquired the software company SAS Institute Inc last year before the founders of SAS decided to drop the deal. The first big foray into software was the company’s acquisition of CA Technologies for $19 billion in 2018.

The demand for cloud services took a hike in recent years. Startups and other businesses which are unable to support in-house IT departments were among the earliest cloud adopters, but with the ease and most of the businesses going digital due to Covid-19 lockdowns, nearly every industry relies on cloud services.