Chipmaker Broadcom is reportedly in discussions to purchase cloud service provider VMware.
The sources said that negotiations between these two are going on, and a deal is not on yet the horizon.
The acquisition would diversify Broadcom’s business shift from semiconductors into enterprise software.
Broadcom and VMware did not imminently give any comment. The market capitalization of VMware was $40.3 billion at the close of the market session on Friday.
The deal is expected to transform the chipmaker Broadcom into a diversified tech company. It will give Broadcom access to data centers where the VMware’s technology is a basis for cloud consumers.
Commenting on the merger, Wells Fargo analysts quoted, “We believe an acquisition of VMware would be considered as making strategic sense; consistent with Broadcom’s focus on building out a deepening enterprise infrastructure software strategy.”
“VMware acquisition would just about triple the size of Broadcom’s software segment, as well as bring the overall software mix close to 50% for the combined company,” Bernstein analysts remarked.