Cash in on Broadcom's takeover of VMware: An arbitrage play with a potential 21% appreciation

Broadcom's $61 billion acquisition of VMware, announced in May, became the third-largest technology acquisition in history, behind Microsoft's $69 billion purchase of Activision Blizzard and EMC's 2016 acquisition of Dell for $67 billion. We can now bet on the completion of this acquisition with up to a 25% return.

The days when Broadcom $AVGOwas knownas a brand that made chips and hardware are long gone. The modern version is growing into a conglomerate that is gobbling up companies, often with older technologies, and finding ways to run them independently and profitably. The new purchase represents a significant shift from their traditional hardware manufacturing to the emerging world of software.

VMware shareholders can choose to receive $142.5 in cash for each of their VMware shares or 0.252 shares of Broadcom stock if the transaction is completed, a nearly 21% premium to the current share price. The transaction is then subject to regulatory…