Semiconductor and chip company Broadcom (AVGO  ) has announced plans to purchase the cloud computing company VMware (VMW  ) in a cash-and-stock deal valued at $61 billion, based on the common stock price for Broadcom on May 25.

"This transaction combines our leading semiconductor and infrastructure software businesses with an iconic pioneer and innovator in enterprise software," Hock Tan, President and Chief Executive Officer of Broadcom, said in a statement.

Broadcom is a massive technology developer and manufacturer, with chips from its brand being used in devices made by Google (GOOGL  ), Apple (AAPL  ), and others. VMware, on the other hand, is known for its virtualization technology, which shares a significant portion of the market for professional virtual machines.

"VMware has been reshaping the IT landscape for the past 24 years, helping our customers become digital businesses," Raghu Raghuram, Chief Executive Officer of VMware, said in a statement. "Combining our assets and talented team with Broadcom's existing enterprise software portfolio, all housed under the VMware brand, creates a remarkable enterprise software player"

The $61 billion purchase will be the third-largest technology acquisition ever, behind the pending $68.7 billion acquisition of Activision Blizzard (AVTI  ) by Microsoft (MSFT  ), and the $67 billion acquisition of EMC by Dell (DELL  ) in 2016.

As a part of that 2016 deal, Dell also acquired VMware. However, the massive price tag landed Dell in considerable debt, and it divested from VMware last year in a spinoff plan meant to help the company pay off that debt.

Amongst semiconductor companies, Broadcom is known for its sizeable acquisitions, with a 2018 acquisition of security software company CA Technologies for $18.9 billion, and a 2019 acquisition of Symantec's enterprise security branch for $10.7 billion. Since then, the Symantec unit has been resold for an undisclosed amount to Accenture.

In 2018, the company also attempted to purchase Qualcomm for a record-shattering $117 billion, but then-President Donald Trump said the deal would be a threat to national security, blocking the acquisition.

The VMware purchase is expected to be completed in 2023. Before the purchase can be completed, it will need to receive approval from regulators and VMware shareholders.

According to the announcement, the deal has received unanimous approval from both companies' boards of directors. Each VMware share can be exchanged for either 0.2520 of Broadcom common stock or $142.50, a 44% premium on the May 25 closing stock price for VMware.