Avago to buy Broadcom for $37 billion in biggest-ever chip deal
Source: Reuters
Avago Technologies Ltd (AVGO.O) agreed on Thursday to buy Broadcom Corp (BRCM.O) for $37 billion in the largest merger of chipmakers ever, turning a lesser known company run by a ferocious dealmaker into one of the biggest industry players.
Broadcom is best known for its connectivity chips, which are used widely in smartphones made by Apple Inc (AAPL.O) and Samsung Electronics Co Ltd (005930.KS).
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The combined company, to be based in Singapore and known as Broadcom, will be the third-largest U.S. semiconductor maker by revenue, behind Intel Corp (INTC.O) and Qualcomm Inc (QCOM.O). The merger is the industry's second megadeal this year and is unlikely to be the last, analysts said.
The $37 billion price represents a premium of about 28 percent over Broadcom's market value of $28.85 billion as of Tuesday's close, before the Wall Street Journal reported that the companies were in talks.
Read more: http://www.reuters.com/article/2015/05/28/us-broadcom-m-a-avago-idUSKBN0OD18120150528
Some added thoughts:
1. Sorry if this is a geek moment, but Broadcom is a hugely important consumer chip maker (they make the chips for Raspberry Pi, for instance), as well as most new laptops' wireless chips.
2. If this moves Broadcom to Singapore, that removes $4.5 billion in overseas money from any US tax liability. (Fortunately DOJ still gets a say here and I hope they'll clawback some of that if they don't block the deal.)
3. This is the first time that a "consumer" chip manufacturer has begun to approach the revenue of Intel or Qualcomm (which are "industrial" chip makers).
hobbit709
(41,694 posts)Getting Broadcom drivers at times is a real PITA.
Recursion
(56,582 posts)And Avago is even less "consumer"-focused than Broadcom.
hobbit709
(41,694 posts)Tried to find a driver for a wireless adapter for a customer's computer. Broadcom says they're an OEM only and if I need a driver go to manufacturer of computer for driver. Manufacturer did not list driver for OS on computer.
Finally ended up swapping wifi card for a different one.
Recursion
(56,582 posts)At least on Linux you can get the PCI ID and query the kernel itself directly.
So, yeah, it's very possible that this deal will mean a more suckful experience for computer users.