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San Jose / New York The rally of the rival Qualcomm was blocked by Trump, now Broadcom's adventure on a new giant deal: the US chip maker wants to develop and buy the software provider CA for $ 19 billion. The offer is supposed to be 20% higher than the last closing price of the stock.
CA Tech manufactures business software and could help Broadcom expand its business base in a new direction. The proposed acquisition is an important element in the plan to become a leader in infrastructure technology, said Broadcom CEO Hock Tan. "With a large installed base of customers, CA is uniquely positioned in the growing infrastructure software market."
The transaction has already been approved by Broadcom's board of directors, a statement said Wednesday. However, shareholders and regulators still have to approve the deal. Broadcom is advised by Deutsche Bank and Bank of America Merrill Lynch, while Qatalyst Partners works with CA Technologies.
According to both companies, CA is valued at $ 44.50 per share. Newspapers had come out with $ 37.21 and rose after hours by 15.6%. On the other hand, shares of Broadcom fell by 5.5%
The acquisition of CA will give Broadcom a software company with strong cash flow but low growth. Last year, the company generated operating income of $ 1.2 billion and revenues of $ 4.2 billion.
Mike Gregoire, CEO of CA, said: Broadcom's leading position in the semiconductor industry. The benefits of the deal will affect our shareholders, who will receive a significant and immediate bonus on their shares, as well as our employees who will join an organization that shares our values, innovation, collaboration and technical excellence. "
The likelihood of Broadcom seeking approval from the Foreign Investment Committee (Cfius) is low, experts say, and Cfus may reject such projects because of concerns about threats to national security.
In mid-March, US President Donald Trump blocked Broadcom's acquisition of Qualcomm, justifying such national security concerns.With $ 121 billion, it would act as the most important acquisition of the history of the US computer industry.
At the time, however, Broadcom was headquartered in Singapore.The company is now headquartered in San Jose, California, and n & n Is not formally subject to Cfius.
CA, formerly known as Computer Associates, has its roots in applications for mainframes, such as banks.CAC is now focusing more and more on business d
The experts were skeptical about Broadcom's plans. The group leader, Tan, has been acquiring other chip companies, the different companies have merged and thus saved money. However, badyst Kinngai Chan of the Summit Insights Group said that it was not clear if CA would succeed. The planned purchase will cause discomfort to investors. Amit Daryanani's expert at RBC Capital Markets wrote in a statement that Broadcom still has a lot to explain
With dpa and Reuters documents
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