US chipmaker Broadcom is planning to acquire software group VMware for setting up a blockbuster tech deal that would vault the chipmaker into a highly specialized area of software.

The deal, worth more than 50 billion, would transform the deal hungry semiconductor group into a diversified tech company ranging from the chips to cloud competing services.

VMware is considered as one of the cloud competing company in the tech industry. Its services are used by large corporations to manage private and public cloud networks as well as data centers.

But the decline in the company’s share price in recent years has led to increased takeover interest. VMware closed trading on Friday at $ 95.71, giving the company a stock market capitalization of $ 40bn, down about half from its 2019 peak and 20 percent below where it traded at the beginning of the year.

A VMware deal would provide a big financial pay-out for personal computer billionaire Dell, who acquired the business in 2016 alongside private equity firm Silver Lake in a $ 67 billion takeover of technology conglomerate EMC.

The deal was one of the largest deals in the tech industry and was largely financed using VM ware as collateral for more than $ 50 billion in borrowing.

According to reports, Broadcom held talks with cyber security group Symantec in 2019 but the negotiations fell apart after the sides were unable to reach an agreement on valuation.

The potential merger between Broadcom and VMware underscores the active market for large technology deals despite a sharp decline in valuations this year amid fears over inflation and the Federal Reserve raising interest rates.