In a buying mood: San Jose’s Broadcom to buy CA Technologies for $18.9 billion
Maybe this time, Broadcom will have better luck than with its last well-known acquisition effort.
Late Wednesday, the San Jose-based communications chipmaker said it had reached a deal to acquire information technology software and services company CA Technologies for $18.9 billion in cash. The deal values CA at $44.20 a share, or a 20 percent premium over where the New York-based company’s shares closed at on Tuesday.
Broadcom, which makes chips used in everything from cellphones to data center networking to broadband communications, said it’s acquiring CA in order to diversify into software and other technologies, such as cloud-based software and services.
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Broadcom Chief Executive Hock Tan said the CA acquisition is “an important building block” for his company’s goal of developing what he called “one of the world’s leading infrastructure technology companies.”
Investors showed what they thought of Broadcom’s plans, and it wasn’t pretty. Broadcom shares fell 15.6 percent, to $205.72 in Thursday’s stock-market session.
The CA deal comes four months after President Donald Trump squelched Broadcom’s $130 billion attempt to acquire communications technology giant Qualcomm on the grounds that it was a national security risk.
In April, Broadcom moved its legal corporate headquarters to San Jose from its previous base in Singapore.
Source:: The Mercury News – Business