ZCZC
BCN-04
US-SOFTWARE-MERGER-BROADCOM
Broadcom buys business software firm CA for $18.9 bn
SAN FRANCISCO, July 12, 2018 (BSS/AFP) – Semi-conductor giant Broadcom,
which recently failed in a bid to buy US rival Qualcomm, on Wednesday
announced a cash deal to buy software and services firm CA Technologies for
$18.9 billion.
Broadcom described CA as a major provider of information technology
management software, in an acquisition that would help the chip maker
diversify its offerings.
“This transaction represents an important building block as we create one
of the world’s leading infrastructure technology companies,” Broadcom chief
executive Hock Tan said in a release.
The deal was approved by the boards of both companies.
Broadcom will pay $44.50 per share of CA stock; about 20 percent over the
closing price for common shares at the end of formal market trading on
Wednesday, according to the company.
“We are excited to have reached this definitive agreement with Broadcom,”
CA Technologies chief Mike Gregoire said in the joint release.
“This combination aligns our expertise in software with Broadcom’s
leadership in the semiconductor industry.”
The companies expected the acquisition to close in the final quarter of
this year. The merger must be approved by shareholders and regulators.
Broadcom in April transferred its headquarters from Singapore to the US as
promised when it tried to buy Qualcomm.
The prior month, President Donald Trump issued an order barring the
proposed $117 billion hostile takeover of Qualcomm, citing what he called
“credible evidence” such a deal “threatens to impair the national security of
the United States.”
It would have been the biggest-ever deal in the tech sector.
Trump’s order made no mention of China, but an earlier letter from the US
Treasury Department warned that a takeover might hurt US leadership in 5G,
super-fast fifth-generation wireless networks now being deployed, and
consequently pose a threat to US security.
The presidential action was allowed because Broadcom is a foreign entity,
but would not have been possible had it completed its move to Silicon Valley.
On March 14, Broadcom said it was withdrawing its offer for Qualcomm.
Broadcom was founded in California but moved its headquarters after a 2015
deal that merged it with Avago Technologies.
BSS/AFP/HR/0945