Wachtell, Lipton, Rosen & Katz and O’Melveny & Myers are representing semiconductor developer Broadcom in its $61 billion acquisition of enterprise software company VMware, represented by Gibson, Dunn & Crutcher.
Cleary Gottlieb Steen & Hamilton is acting as regulatory counsel for Broadcom on the deal, and Simpson Thacher & Bartlett is representing private equity firm Silver Lake, the second-largest shareholder of VMware.
The deal is the second-largest of 2022, behind only Microsoft’s $75 billion bid to purchase video game publisher Activision.
The Wachtell team is led by corporate partners David Karp, Ronald Chen and Viktor Sapezhnikov. Finance partner Gregory Pessin, executive compensation and benefits partner Erica Bonnett and tax partner T. Eiko Stange rounded out the team for Wachtell.
The Gibson Dunn team includes corporate partners Barbara Becker, Saee Muzumdar and Andrew Kaplan. Finance partners Douglas Horowitz and Darius Mehraban advised on financing while partners Eric Sloan and Pamela Endreny advised on tax issues. Partners Kristen Limarzi and Attila Borsos advised on antitrust issues, Michael Collins advised on benefits, and Daniel Angel worked on IP.
The deal team at O’Melveny was not immediately available.
The Cleary team is led by antitrust partners George Cary, Dan Culley, Francisco Enrique Gonzalez-Diaz and Cunzhen Huang.
The Simpson team includes M&A partners Atif Azher, Bill Dougherty and Naveed Anwar; tax partners Drew Purcell and Russell Light; capital markets partners Ken Wallach and Hui Lin; employee compensation and benefits partner Tristan Brown; IP partner Lori Lesser and public company advisory partners Jennifer Nadborny and Sara Razi.
The deal has Broadcom paying $138.23 per share for VMware, or about 40% over its stock price before rumors of the acquisition took hold last weekend.
VMware was spun off from Dell Technologies, which owned an 81% share of the company via its acquisition of EMC, in April 2021 for $52 billion.
VMware had sought independence for some time, believing the freedom to create its own partnerships would benefit the company. But its stock slid after the spin-off, dropping 19% from the beginning of 2022 through last May 20, according to a report in The New York Times.
The loss in value likely made VMware a more palatable choice for Broadcom, which had tried to purchase chipmaker Qualcomm in March 2018 for $117 billion before the deal was blocked by the Trump administration on national security grounds.
Broadcom has been piecing together a tech portfolio for some time since that decision. The company bought CA Technologies in 2018 for $18.9 billion in cash and Symantec in 2019 for $11 billion in 2019.
VMware is still a revenue generator. The company reported revenue of $12.9 billion in its last fiscal year, an increase of 9% year-over-year. That growth rate, however, was slower than its cloud-computing competitors at Microsoft, Google and Amazon.
“Building upon our proven track record of successful M&A, this transaction combines our leading semiconductor and infrastructure software businesses with an iconic pioneer and innovator in enterprise software, as we reimagine what we can deliver to customers as a leading infrastructure technology company,” CEO Hock Tan said in a statement.
Broadcom’s deal with VMware includes a “go-shop” clause that allows VMware 40 days to find a better offer.