Broadcom in talks to acquire cloud company VMware

The transaction would extend a run of acquisitions for Broadcom Chief Executive Officer Hock Tan, who has built one of the largest and most diversified companies in the chip industry.

Broadcom Inc. is in talks to acquire cloud-computing company VMware Inc., according to people familiar with the matter, setting up a blockbuster tech deal that would vault the chipmaker into a highly specialized area of software.

The discussions are ongoing and there’s no guarantee they will lead to a purchase, said the people, who asked not to be identified because the matter isn’t public. VMware currently has a market valuation of about $40 billion. Assuming a typical premium, the potential deal price would be higher, though the terms under consideration couldn’t be learned.