Broadcom-VMware: $61bn acquisition goes unchallenged as 'go-shop' deadline passes

Broadcom’s May 26 blockbuster offer to buy VMware for $61bn included a provision to allow VMware 40 days to find another buyer

Broadcom's $61bn takeover deal for VMware may press ahead with no rival bid as a pre-arranged ‘go-shop' clause to allow the virtualisation vendor to find another buyer expired at 23:59 Pacific Time on July 5.

The chipmaker giant's May 26 acquisition offer included the 40-day provision, in addition to a commitment to purchase all of the outstanding shares of VMware if a competitor was not found.

VMware and Broadcom's channel moving forwards

As reported by CRN's sister publication Channel Partner Insight (CPI), some VMware partners have viewed the impending ownership of Broadcom with concern.

Talking to CPI of their misgivings ,one UK MSP, Wanstor, said the move is "bad news" for VMware customers.

Its CTO Richard Kuczma said the move will result in "less investment in R&D going forward".

Within the last two weeks, VMware global channel boss Sandy Hogan resigned amid ongoing uncertainty over what the Broadcom deal will mean for VMware partners.

Her resignation will be effective as of today.

However, Broadcom CEO Hock Tan has sought to reassure the channel.

Earlier this month Broadcom's board said it had already held its first integration meeting in order to "hit the ground running".

Tan also shared an open letter in which he said: "We appreciate that VMware's culture is built on execution, passion, integrity, customers and community.

"We too share values like these. At Broadcom we prioritise accountability - to our customers, our partners, our shareholders and each other."

Broadcom's acquisition past

Last year, Broadcom's attempt to buy data analytics and management company SAS Institute was thwarted when the firm said it was not up for sale to Broadcom.

However, in 2019 it snapped up security software developer Symantec Enterprise for $10.7bn and CA Technologies for $18.9bn.

There was a flurry of channel executive resignations from the Symantec European business in response to Broadcom "stripping costs" including Germany boss Thomas Hoffman and central European boss Kira Zaytsev.

Broadcom sold off Symantec's cybersecurity services business to Accenture at the start of 2020.

There was also unrest among its European distribution partners.

Distributor Nuvias ended its relationship with Symantec, replacing it with Romanian firm Bitdefender, while the CEO of Swiss VAD Infinigate, Klaus Schlichtherle, described Broadcom communication to the channel in the wake of its purchase of Symantec as "silence".

Broadcom also added storage networking provider Brocade Communications Systems to its portfolio in 2017 in a $5.5bn deal.