After the transaction is complete, the Broadcom Software Group will rebrand as VMware and include existing infrastructure and security software solutions as part of an expanded VMware portfolio.

Dell, which owns roughly 40% of VMware, will gain by about US$9 billion through the acquisition. Silver Lake, which owns 9% of VMware, will also benefit.

Broadcom president and chief executive Hock Tan said in a statement: "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 re-imagine what we can deliver to customers as a leading infrastructure technology company.

"We look forward to VMware's talented team joining Broadcom, further cultivating a shared culture of innovation and driving even greater value for our combined stakeholders, including both sets of shareholders."

VMware chief executive Raghu Raghuram commented: "VMware has been reshaping the IT landscape for the past 24 years, helping our customers become digital businesses.

"We stand for innovation and unwavering support of our customers and their most important business operations and now we are extending our commitment to exceptional service and innovation by becoming the new software platform for Broadcom.

"Combining our assets and talented team with Broadcom's existing enterprise software portfolio, all housed under the VMware brand, creates a remarkable enterprise software player.

"Collectively, we will deliver even more choice, value and innovation to customers, enabling them to thrive in this increasingly complex multi-cloud era."

Michael Dell, who chairs the VMware board, said: "Together with Broadcom, VMware will be even better positioned to deliver valuable, innovative solutions to even more of the world's largest enterprises.

"This is a landmark moment for VMware and provides our shareholders and employees with the opportunity to participate in meaningful upside."

However, David Bicknell, principal analyst at data and analytics company GlobalData, had a more cautious view, saying that VMware should pay heed to the experiences of Symantec and CA Technologies after they were acquired by Broadcom.

"CA Technologies reportedly saw a 40% reduction in US headcount and employee termination costs were also high at Symantec," he said. “VMware currently has a strong reputation for its cyber-security capability in safeguarding endpoints, workloads, and containers. Broadcom’s best shot at making this deal work is to let profitable VMware be VMware.

“Although a chip company buying a cloud software company wouldn’t ordinarily raise US regulatory concerns, the takeover of a leading-edge US cloud software vendor by a Singapore-based company with very strong links to China might prompt regulatory interest given today’s geopolitical backdrop. Still, it’s unlikely to scupper the deal.

“After having its fingers burnt by regulators in its failed bid to buy Qualcomm, Broadcom will expect this deal to go through. But it shouldn’t be surprised if regulators take a close interest.”