executives leave the enterprise software company that
want to acquire for $61 billionthe VMware leader told staff in a note on Monday.
VMware CEO Raghu Raghuram said senior vice presidents of cloud infrastructure Mark Lohmeyer; Application Business and Management, Ajay Patel ; and networking and advanced security Tom Gillis are leaving, according to the memo, which was reviewed by The Wall Street Journal.
Broadcom said in May plans to buy VMware as part of the company’s broader push for chips in software. VMware will nearly triple the size of Broadcom’s software division and account for nearly 49% of the company’s revenue. The deal is still awaiting regulatory approval.
“As happens during such a transition, we find that some executives decide to move on,” according to the internal memo. “All three have held leadership positions for a number of years and have had a major impact on the business.”
A VMware spokesman confirmed the departures and said the company had named four executives to replace them.
The U.S. Federal Trade Commission is seeking information from the companies about the combination, according to a previous regulatory filing.
Broadcom expects an extended review period for the deal in many jurisdictions around the world, Chief Executive Officer Hock Tan said on a call with analysts last week, although it has already received clearance in three countries – Brazil, Canada and South Africa. He said he still expects it to be completed in the company’s 2023 fiscal year, which ends next October.
Broadcom, with an extensive history of acquisitions, is no stranger to scrutiny of its deals, including on national security grounds. The company, which was based in Singapore before moving to the US in 2018, had a $117 billion hostile bid for the cellphone chipmaker
suspended by the former president
due to concerns about the implications for the US technology clash with China.
Mr. Tan has a history of finding companies with deep ties to the information technology structures of large corporations that would be difficult to abandon. The company then cuts costs and gets the most out of its products by “cross-selling and scaling,” as Broadcom’s head of software, Tom Krause, described the strategy last November.
VMware signaled that the departures are not expected to affect its operations. The memo pointed to the company’s strong and experienced set of senior executives poised to step into the roles, as well as broader efforts to reorient its business. VMware is “preparing to enter the next phase of growth and evolution as a division of Broadcom in 2023,” Mr. Raghuram wrote.
Shares of Broadcom rose 2.2% in Monday trading, with VMware shares up 1.4%.
Regulators in Washington are taking an increasingly hard line on tech mergers. The FTC last week filed a lawsuit
over its planned purchase of the video game manufacturer
Activision Blizzard Inc.
in February cancel your purchase transaction British chip design specialist Arm amid regulatory concerns. The FTC on Thursday also asked a judge for a stay
Meta platforms Inc
planned acquisition of a virtual reality startup.
Broadcom said it is paying half in cash and half in stock and will assume $8 billion of VMware’s debt. The deal, if completed, would be one of the largest in the technology industry to date. Broadcom will owe a $1.5 billion termination fee if the deal falls apart.
— Asa Fitch contributed to this article.
Write to Emily Glazer c [email protected]
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