Broadcom in talks to buy VMware

May 22 (Reuters) – Chipmaker Broadcom Inc (AVGO.O) is in talks to acquire cloud service provider VMware Inc (VMW.N), people familiar with the matter told Reuters.

Negotiations between Broadcom and VMware are ongoing and a deal is not imminent, the sources said. The deal terms under discussion could not be learned.

The acquisition would further diversify Broadcom’s business away from semiconductors and into enterprise software, following its $18.9 billion acquisition of CA Technologies and its $10.7 billion purchase of Symantec Corp’s security division in the last four years.

Bloomberg News first reported the deal late on Sunday. Broadcom and VMware did not immediately respond to Reuters’ requests for comment. As of Friday’s market close, the market capitalization of VMware was $40.3 billion.

Michael Dell is VMware’s biggest investor with a 40% stake as a result of Dell Technologies Inc(DELL.N)having spun out VMWare to its shareholders last year, according to Refinitiv data.

Private equity firm Silver Lake, which has previously invested in Broadcom, is VMware’s second largest shareholder with a 10% stake, Refinitiv data shows.

Reporting by Greg Roumeliotis in New York and Shivam Patel in Bengaluru; Editing by Christian Schmollinger, Tom Hogue and Chris Reese

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