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Broadcom acquires CA Technologies for $18.9B in cash

Broadcom, the huge semiconductor provider it’s possible you’ll keep in mind from its failed attempt to amass Qualcomm, immediately introduced that it has reached a definitive settlement with CA Technologies, a significant IT administration software program and options supplier. The worth of the acquisition is $18.9 billion in money. CA’s shareholders will obtain $44.50 per share, a 20 p.c premium over the closing worth of the corporate’s inventory immediately.

It’s a little bit of a shock to see chip producer Broadcom purchase a significant software and services firm. “This transaction represents an necessary constructing block as we create one of many world’s main infrastructure expertise corporations,” Broadcom CEO and president Hock Tan explains in immediately’s announcement. “With its sizeable put in base of shoppers, CA is uniquely positioned throughout the rising and fragmented infrastructure software program market, and its mainframe and enterprise software program franchises will add to our portfolio of mission important expertise companies. We intend to proceed to strengthen these franchises to satisfy the rising demand for infrastructure software program options.”

This remark doesn’t precisely clarify the rationale behind immediately’s acquisition, however Broadcom is clearly attempting to diversify its choices. Earlier this yr, the corporate walked away from its proposed hostile take-over of Qualcomm after the Trump administration blocked it. On the time, Broadcom was prepared to pay $117 billion for Qualcomm, which might have significantly prolonged the corporate’s semiconductor enterprise. In the present day’s transfer sees Broadcom enter a totally new enterprise.

The corporate expects the acquisition to shut within the fourth quarter if 2018. It’s unlikely that Broadcom will face any main headwind from Washington this time round.

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