Broadcom (AVGO), an American semiconductor behemoth, is preparing to acquire VMware for $61 billion.
Despite the economic uncertainty, this is one of the year's biggest deals.
The purchase price is 44% higher than VMW's closing price on May 20.
The deal is subject to division, with 50% of VMW shares transferable for cash and 50% for stock, according to Broadcom.
Holders of AVGO stock will own 88% of the company after the acquisition concludes, with VMW shareholders owning the remaining 12%.
Within three years of closure, AVGO expects the purchase to add $8.5 billion in pro forma EBITDA.
The purchase is expected to be finalised in Broadcom's fiscal year 2023, according to the two businesses.
The first option for investors is to get $142.50 in cash for each share of VMW stock they possess.
Alternatively, for each VMW share held, investors will receive 0.252 shares of AVGO stock.
As of Thursday morning, AVGO stock is up 3.49%, while VMW stock has gained 2.60%.