VMware shareholders voted to approve the pending merger with Broadcom, cementing a critical step that moves the deal closer to the finish line.
The vote took place Friday at a meeting of stockholders, which considered not just the fate of the merger but the compensation that Broadcom has arranged for VMware executives. With majority shareholder Michael Dell having already pledged his 40-per cent ownership stake to voting in favour of the acquisition, the outcome of the vote was heavily weighted towards seeing the deal through.
In all, 352.6 million shares were cast in favour of being acquired by Broadcom — 99.61 percent of the total vote — while 681,000 shares were cast in opposition and 687,000 shares were listed as having abstained.
VMware said there are 424.4 million shares of the company's common stock that were eligible to cast votes. Of those, 353.9 million voted.
One area that received pushback was the compensation for VMware executives. CRN reported last month on the $169.4 million golden parachute that Broadcom had arranged for VMware's top five executives, once the deal closes.
The owners of more than 4.2 million shares opposed the pay — or 1.2 per cent of the total votes cast — while 348.2 million shares voted to approve the golden parachute.
Since the deal was announced on 26 May there has been consternation from long-time customers and partners about Broadcom's commitment to developing VMware, supporting its current customers, selling through the channel, and around pricing.
Broadcom CEO Hock Tan and VMware CEO Raghu Raghuram have pushed back against those fears, with both men telling channel partners to expect more empowerment under Broadcom's ownership, and pointing to the billions Broadcom spends on research and development.
"VMware's collaborations across the ecosystem, combined with Broadcom's exciting technologies, innovative partnership models and deep relationships, will enable partners to better capitalise on new business opportunities and create differentiated solutions that they can replicate with other customers," Tan wrote in an advertisement he paid for on CRK UK. "We also see opportunities with existing Broadcom Software solutions to create even more value for partners across the combined network."
The deal still faces regulatory hurdles in the US and Europe.
In the US the Federal Trade Commission has spent nearly four months on a "second request" review of the deal which could saddle Broadcom with conditions it wants to see met in order to approve the merger. The FTC might also approve the deal as it, or sue in federal court to block it entirely.
The outcome of that investigation is still pending. Meanwhile the European Commission, which previously saddled Broadcom with a seven-year settlement that allows regulators to inspect the company's books for evidence of illegal activity, have not made public statements about the deal.