Avago Technologies plans to buy Broadcom for $ 37 billion

Photo: David Paul Morris / Bloomberg

Avago Technologies, a chip maker from Singapore, plans to acquire a competitor, Broadcom, for $ 37 billion. If the deal does take place, this will be one of the most noticeable takeovers on the market. Of the $ 37 billion, a part will be paid in cash ($ 17 billion), and a part - in shares ($ 20 billion), writes Vedomosti. After the merger, the merged company will receive the name Broadcom, but it will be headed by Avago CEO Hock Tan.

Partners are going to close the deal in the first quarter of 2016. Upon completion of the transaction, the current shareholders of Broadcom 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 and cash flow.

After information about the deal appeared on the Web, Broadcom shares went up by 21%. Avago shares went up by 7.8%.
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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 volume of the transaction amounted to $ 11.8 billion. Intel is currently negotiating with Altera , offering management $ 14 billion over company assets.

Avago is a former division of Heewlett-Packard, this company manufactures electronic components for wireless communication systems, as well as for corporate storage systems.