Wachtell, Lipton, Rosen and Katz, O’Melveny & Myers and Miles & Stockbridge advised Broadcom on the deal, while Simpson Thacher represented Silver Lake on the deal. Debevoise & Plimpton advised JP Morgan as financial advisor to VMware. Cahill advised the financing sources.
VMware announced its acquisition from Broadcom in a cash-and-stock transaction that values VMware at approximately $61 billion, based on the closing price of Broadcom’s common stock as of May 25, 2022. In addition, Broadcom will assume $8 billion of VMware net debt. Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, VMware shareholders will elect to receive either $142.50 in cash or 0.2520 shares of Broadcom common stock for each VMware share.
The shareholder election will be subject to proration, resulting in approximately 50% of VMware’s shares being exchanged for cash consideration and 50% being exchanged for Broadcom common stock.
Based on the closing price of Broadcom common stock on May 25, 2022, the total $138.23 per-share consideration represents a 44% premium to the closing price of VMware common stock on May 20, 2022, the last trading day prior to media speculation regarding a potential transaction, and a 32% premium to VMware’s unaffected 30-day volume weighted average price (VWAP).
Upon closing of the transaction, based on the outstanding shares of each company as of the date hereof, current Broadcom shareholders will own approximately 88% and current VMware shareholders will own approximately 12% of the combined company on a fully diluted basis.
The transaction is subject to satisfaction of customary closing conditions, including regulatory approvals and VMware stockholder approval.
VMware is a leading provider of multi-cloud services for all apps, enabling digital innovation with enterprise control. The company’s cloud, app modernization, networking, security, and digital workspace offerings help customers deliver any application on any cloud across any device.
Broadcom is a global technology leader that designs, develops and supplies a broad range of semiconductor and infrastructure software solutions. Broadcom’s category-leading product portfolio serves critical markets including data center, networking, enterprise software, broadband, wireless, storage and industrial. Its solutions include data center networking and storage, enterprise, mainframe and cyber security software focused on automation, monitoring and security, smartphone components, telecoms and factory automation.
The Simpson Thacher team included Atif Azher, Bill Dougherty, Naveed Anwar and Kira Shannahan (M&A); Drew Purcell, Russell Light, Scott Grundei and Preston Irace (Tax); Ken Wallach, Hui Lin and Jessica Asrat (Capital Markets); Tristan Brown (Executive Compensation and Employee Benefits); Lori Lesser (Intellectual Property); Jennifer Nadborny (PCAP); and Sara Razi, Kelly Karapetyan and Daniel Owsley (Antitrust).
The Wachtell Lipton’s team was led by Partners David C. Karp, Ronald C. Chen and Viktor Sapezhnikov and included Elizabeth A. Ingriselli, Associate, Kyle M. Diamond, Associate, Rebecca K. Rosen, Associate, Derrick L. Parker, Jr., Associate, Ryan W. Mainous, Summer Associate (Corporate), Gregory E. Pessin, Partner, Benjamin S. Arfa, Associate, David G. Sheinfeld, Associate (Finance), Erica E. Bonnett, Partner, Dixing Tang, Associate (Executive Compensation and Benefits), T. Eiko Stange, Partner, Alexandra M. Ferrara, Associate, and Sarah Perez Berger, Law Clerk (Tax).
The Debevoise team was led by M&A partner Michael Diz and included partners Jennifer Chu and William Regner and associate Caroline Brown.
The O’Melveny team advising Broadcom was led by Silicon Valley M&A partner Adit Khorana, along with partners Andrew Dolak and Greta Lichtenbaum, special counsel Scott Pink, counsel Kirk Dungca, Tom Oslovar, David Ribner, Clarence Rowland, and associates Lauren Stamey and Tara McMillen.
The Cahill team was led by partners Bill Hartnett, Sean Davis and Dan Anderson and included associates Nick Rodriguez, Keith Marantz and law clerk Spencer Shweky.
The Miles & Stockbridge team included Roger V. Abbott, Alfred M. Wurglitz and C. Peter Dungan.
Involved fees earner: Caroline Brown – Debevoise & Plimpton; Jennifer Chu – Debevoise & Plimpton; Michael Diz – Debevoise & Plimpton; William Regner – Debevoise & Plimpton; Roger Abbott – Miles & Stockbridge ; Peter Dungan – Miles & Stockbridge ; Alfred Wurglitz – Miles & Stockbridge ; Andrew Dolak – O’Melveny & Myers LLP; Kirk Dungca – O’Melveny & Myers LLP; Adit Khorana – O’Melveny & Myers LLP; Greta Lichtenbaum – O’Melveny & Myers LLP; Tom Oslovar – O’Melveny & Myers LLP; Scott Pink – O’Melveny & Myers LLP; David Ribner – O’Melveny & Myers LLP; Clarence Rowland – O’Melveny & Myers LLP; Lauren Stamey – O’Melveny & Myers LLP; Naveed Anwar – Simpson Thacher & Bartlett; Jessica Asrat – Simpson Thacher & Bartlett; Atif Azher – Simpson Thacher & Bartlett; Tristan Brown – Simpson Thacher & Bartlett; William Dougherty – Simpson Thacher & Bartlett; Scott Grundei – Simpson Thacher & Bartlett; Preston Irace – Simpson Thacher & Bartlett; Kelly Karapetyan – Simpson Thacher & Bartlett; Lori Lesser – Simpson Thacher & Bartlett; Russell Light – Simpson Thacher & Bartlett; Hui Lin – Simpson Thacher & Bartlett; Jennifer Nadborny – Simpson Thacher & Bartlett; Daniel Owsley – Simpson Thacher & Bartlett; Andrew Purcell – Simpson Thacher & Bartlett; Sara Razi – Simpson Thacher & Bartlett; Kira Shannahan – Simpson Thacher & Bartlett; Kenneth Wallach – Simpson Thacher & Bartlett; Benjamin Arfa – Wachtell, Lipton, Rosen & Katz; Erica Bonnett – Wachtell, Lipton, Rosen & Katz; Ronald Chen – Wachtell, Lipton, Rosen & Katz; Kyle Diamond – Wachtell, Lipton, Rosen & Katz; Alexandra Ferrara – Wachtell, Lipton, Rosen & Katz; Elizabeth Ingriselli – Wachtell, Lipton, Rosen & Katz; David Karp – Wachtell, Lipton, Rosen & Katz; Derrick Parker – Wachtell, Lipton, Rosen & Katz; Gregory Pessin – Wachtell, Lipton, Rosen & Katz; Rebecca Rosen – Wachtell, Lipton, Rosen & Katz; Viktor Sapezhnikov – Wachtell, Lipton, Rosen & Katz; David Sheinfeld – Wachtell, Lipton, Rosen & Katz; Eiko Stange – Wachtell, Lipton, Rosen & Katz; Dixing Tang – Wachtell, Lipton, Rosen & Katz;