Semiconductor device manufacturer Avago Technologies is buying Broadcom for $37 billion.
Avago will pay $17 billion in cash and $20 billion in stock, and expects to post annual revenue of $15 billion.
The combined company, Broadcom Limited, will be the world’s sixth largest chipmaker in terms of revenue. It will be valued at $77 billion.
Broadcom shareholders will own approximately 32 percent of the new company.
Avago CEO Hock Tan will remain as CEO of Broadcom Limited. Broadcom CTO and co-founder Dr. Henry Samueli will join the board of the combined company.
Avago said the acquisition will create the world’s largest communications platform in the industry.
“Today’s announcement marks the combination of the unparalleled engineering prowess of Broadcom with Avago’s heritage of technology from HP, AT&T, and LSI Logic, in a landmark transaction for the semiconductor industry. The combination of Avago and Broadcom creates a global diversified leader in wired and wireless communication semiconductors. Avago has established a strong track record of successfully integrating companies onto its platform. Together with Broadcom, we intend to bring the combined company to a level of profitability consistent with Avago’s long-term target model,” said Tan.
Avago is based in Singapore and San Jose, CA; Broadcom is based in Irvine, CA.
