Shares of Broadcom Inc. rallied into record territory Monday, after the semiconductor and software company agreed to sell its End-User Computing Division to KKR & Co. Inc. in a deal valued at $4 billion.
Broadcom’s stock
AVGO,
+1.07%
climbed 1.2% in afternoon trading, which puts it on track to close above its Feb. 22 record close of $1,304.90.
The stock’s rally has lifted Broadcom’s market capitalization to $613.8 billion, which makes the company the 10th-most valuable in the S&P 500 index
SPX,
just behind ninth-place Tesla Inc.
TSLA,
+3.87%
at $632.9 billion.
KKR shares
KKR,
+0.19%
edged up 0.1% in afternoon trading Monday.
The EUC Division was originally part of VMware, which Broadcom acquired in a deal that closed in November 2023. The division provides digital workspace offerings that allows businesses to manage desktops and data across any platform.
“We are confident that this pending transaction marks an exciting next chapter for the EUC Division and one that will create enormous opportunities and benefits for our customers, partners and employees,” said Shankar Iyer, general manager of the EUC Division.
The deal is expected to close later this year, after which the division will continue to operate as a standalone company, run by its existing management team.
The division will also implement KKR’s employee-ownership program, which helps motivate employees because it makes them owners in their businesses.
Broadcom’s stock has soared 34% over the past three months, while the S&P 500
SPX
has gained 11.3%.
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