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Broadcom Builds $60 Billion Hedge Against Chip Turmoil With VMware Pursuit

Acquiring the cloud-computing company would help Broadcom depend less on chips—a strategy CEO Hock Tan has been at for years 

Hock Tan, center, speaks in the Oval Office of the White House in 2017.

Hock Tan, center, speaks in the Oval Office of the White House in 2017.

Photographer: Martin H. Simon/Polaris/Bloomberg

Broadcom Inc. Chief Executive Officer Hock Tan is circling his latest target in a streak of software-company acquisitions, this time pursuing VMware Inc. to add steadier revenue flow and wider margins as a hedge against the dramatic ups and downs of demand in the semiconductor business.

The chipmaker could unveil an agreement of about $60 billion, or $140 a share, to acquire cloud-computing company VMware as soon as Thursday in what is likely to be Broadcom’s biggest deal ever, according to people familiar with the matter. VMware created the market for a type of software that lets businesses run corporate networks more efficiently, and recently has shifted toward serving clients who are moving those applications to the cloud, including through a partnership with web-services giant Amazon.com Inc. VMware also sells software for security, networking and managing mobile devices.