Cisco Systems plans to acquire a 1.6% equity stake in virtualisation software company VMware, mirroring a step Intel took earlier this month.
The investment is part of an upcoming initial public offering (IPO) of 10% of VMware's stock.
Cisco says it plans to buy US$150 million (NZ$195 million) of VMware shares, which are owned at present by EMC, VMware's parent company. The move is subject to regulatory and other closing conditions. Once the investment has been made, Cisco will own around 1.6 percent of VMware's total outstanding common stock. Cisco and VMware have also agreed to collaborate on joint development and marketing.