Avago Technologies plans to buy Broadcom for $ 37 billion
Photo: David Paul Morris / Bloomberg
Singapore-based chip maker Avago Technologies plans to acquire a competitor, Broadcom, for $ 37 billion. If the deal really does take place, it will be one of the most visible takeovers on the market. Of the $ 37 billion, part will be paid in cash ($ 17 billion), and part - in shares ($ 20 billion), Vedomosti writes . After the merger, the combined company will receive the name Broadcom, but Avago CEO Hawk Tan will head it.
Partners are going to close the deal in the first quarter of 2016. Upon completion of the transaction, the current Broadcom shareholders will own 32% of the new company. The annual income of such a company should be about $ 15 billion, while analysts expect an increase in profit growth and cash flows.
After information about the deal appeared on the Web, Broadcom shares rose 21%. Avago shares rose 7.8%.
Note that since the beginning of 2015, the volume of mergers and acquisitions in this area has already exceeded $ 26 billion. Among the most notable transactions of the year is the merger of Freescale Semiconductor with NXP Semiconductors, while the deal amounted to $ 11.8 billion. Intel is currently negotiating with Altera , offering management $ 14 billion for the company's assets.
Avago - a former division of Heewlett-Packard, this company manufactures electronic components for wireless communication systems, as well as for corporate storage systems.