American cloud infrastructure and business mobility company, VMware, Inc. (NYSE:VMW), announced the departure of three top executives as the company prepares to merge with Broadcom, Inc. (NASDAQ:AVGO), a semiconductor and infrastructure software developer.
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As per an internal memo viewed by WSJ, the departures include senior vice president of cloud infrastructure, Mark Lohmeyer; applications and management business, Ajay Patel; and networking and advanced security, Tom Gillis.
VMware CEO, Raghu Raghuram said in the memo, “As it happens during such transition, we find some executives decide to move on… All three have held leadership positions over several years and drove much impact across the business.”
Meanwhile, a spokeswoman for VMware confirmed the news and noted that the company has several experienced senior executives that are ready to take on the roles. VMware is “preparing to enter the next phase of growth and evolution as a division of Broadcom during 2023,” Raghuram added.
How Long Will Broadcom’s Acquisition of VMware Take?
Broadcom’s $61 billion takeover of VMware, announced in May 2022, will be one of the largest tech deals to date. The deal draws scrutiny from regulators worldwide due to the scale and nature of the potential combination of both companies. A lengthened probe into the monopolistic nature of such large deals is not new in the U.S. Remarkably, Broadcom plans to complete the deal by the end of October 2023.
The parties have already received approval from Brazil, Canada, and South Africa. Broadcom is planning to make an appeal to the European Union for the early approval of the buyout, with the second phase of the investigation set to start soon.
Importantly, Broadcom hopes to accelerate its push into the software market with the VMware deal and aims to earn nearly 49% of its revenue from the VMware segment.
Will VMware Stock Go Up?
On TipRanks, the average VMware price forecast of $136.13 does imply an 11% upside potential from current levels. Having said that, with the ambiguity of the deal in place, analysts have a Hold consensus rating on VMware stock. This is based on one Buy versus five Hold ratings. Year to date, VMW stock has gained 3.7%.
