SPOTLIGHT: BIGS GET BIGGER

Each week, we report instances where the money junky hedge funds, private equity groups and the already big companies swallow another piece of the global economy. Here are some more of what the BIGS have been gobbling up and how the Bigs keep getting bigger and the rich keep getting richer.

BROADCOM TO BUY VMWARE FOR $61 BILLION

Broadcom, which makes products for technology infrastructure, will buy cloud computing and virtual reality specialist VMWare for cash and stock worth $61 billion, based on Broadcom’s 25 May closing share price.

Broadcom’s stock gained 3.5 percent on the news; VMWare’s 3.1 percent.

The deal would be the third largest acquisition in tech history, behind Microsoft’s upcoming takeover of Activision Blizzard for $69 billion and Dell’s $67-billion purchase in 2016 of EMC.

VMWare’s technology will expand Broadcom from making electronic devices into enterprise software, which tends to be more profitable, CNN Business reported.

Broadcom has a long-standing appetite for other companies.

It bought CA Technologies in 2018 for $18.9 billion and paid $10.7 billion in 2019 to take over cybersecurity giant Symantec, which is now known as Norton LifeLock.

Broadcom also announced first-quarter results that beat expectations for revenue and for profit.

Revenue grew 23 percent above that of a year earlier to $8.1 billion. Adjusted earnings were $9.07 per share, well beyond Wall Street’s consensus estimate of $8.70.

TOTALENERGIES BUYS HALF OF CLEARWAY

French energy company TotalEnergies SE, one of the world’s seven “supermajor” oil and gas producers, has bought a 50-percent stake in Clearway Energy Group for about $2.4 billion.

Clearway, based in New York City, is the fifth-largest U.S. producer of renewable energy, turning out 7.7 gigawatts of wind and solar and also developing new projects that total three times that amount, TotalEnergies said in announcing the purchase.

TotalEnergies bought its half of Clearway from private equity firm Global Infrastructure Partners, paying $1.6 billion in cash and giving an interest in a TotalEnergies division that owns half of Sunpower Corp., a U.S. solar energy business.

Last year, TotalEnergies announced plans to buy 25 percent of Adani Green Energy, one of India’s largest solar power producers, for $2.5 billion.

Analysts and investment bankers expect oil majors to boost their investments in green energy firms as the world shifts more toward renewable power sources, The Wall Street Journal said.

TotalEnergies has the largest green portfolios among the world’s large oil companies, RBC Capital Markets analyst Biraj Borkhataria told the WSJ.

CEO PAY SETS RECORD

The median compensation for the CEO of a Standard & Poor’s 500 corporation in 2021 was $14.5 million, 17.1 percent more than the year before, the Associated Press reported.

In contrast, average worker pay rose 4.4 percent during the same time, the fastest clip since 2001.

However, inflation ran above 4.4 percent for the last eight months of 2021, negating those raises and reducing workers’ real purchasing power.

CEOs’ compensation is usually determined by a company’s financial performance and gains in share prices.  

The total compensation typically combines a base salary with bonuses, often in the form of options to buy company shares at a fixed price in the future. 

Median compensation rose largely because stock prices rocketed up through 2021 as the economy emerged from the COVID War.