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VMware Closes $2.7B Acquisition of Pivotal; Pat Gelsinger Quoted

Jeff Brody
Pat Gelsinger

VMware (NYSE: VMW) has completed its purchase of San Francisco-based Pivotal Software for approximately $2.7B in a push to provide clients with integrated platforms needed to speed up software delivery across cloud, edge and data center environments.

“It’s my pleasure to announce Ray O’Farrell as the leader of VMware’s new Modern Applications Platform business unit—uniting the Pivotal and VMware Cloud Native Applications teams,” VMware CEO Pat Gelsinger said in a statement published Monday. “Together, we’re poised to be the leading enabler of Kubernetes with a deep understanding of both operators and developers.”

VMware will integrate Pivotal’s offerings into its Tanzu portfolio of platforms and services designed to help clients transform their approach of creating and managing applications using the Kubernetes infrastructure.

Merger discussions between VMware and Pivotal were initially reported in August. Under the transaction, VMware agreed to pay $15 per share in cash to acquire Pivotal’s outstanding Class A common shares. Dell Technologies, which serves as Pivotal’s and VMware’s majority shareholder, secured approximately 7.2M shares of VMware Class B common stock at an exchange ratio of 0.0550 shares of VMware Class B common stock for each share of the San Francisco-based company’s Class B common stock.

An official with Raytheon, a mutual customer of VMware and Pivotal, welcomed the transaction. “By working with both Pivotal and VMware, we’ve been able to completely transform how we write software for our military and government customers,” said Todd Probert, vice president for C2, space and intelligence at Raytheon. “Combining these companies under a single umbrella is going to make it possible for my team to get code to our customers even faster and easier.”

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