The global chipmaking business continued to consolidate Thursday morning, with Singapore's Avago Technologies confirming its $37 billion purchase of Broadcom, a leading supplier of silicon device parts to cable, wireless and other telecom sectors.
Avago will pay $17 billion in cash and the rest in stock for Irvine, Calif.-based Broadcom, with the combined asset being renamed Broadcom Limited and overseen by Avago president and CEO Hock Tan.
Dr. Henry Samueli, co-founder, CTO and chairman of Broadcom, will stay aboard, serving on the board and as CTO of the new company. Dr. Henry Nicholas, co-founder and former CEO of Broadcom, will serve a strategic advisory role. No role has yet been defined for current Broadcom CEO Scott McGregor.
Avago projects the deal to close in the first quarter of 2016. (For a look at how Avago's purchase of Broadcom is impacting the wireless business, click on this FierceWireless story.)
Founded in 1991, Broadcom is a leading chip supplier for cable set-top boxes, as well as DOCSIS 3.0 and DOCSIS 3.1 components. In fact, Broadcom is one of only three vendors currently shipping chips for DOCSIS 3.1 devices.
"Avago gets a market leadership position when it comes to broadband access, including cable, FTTH, and DSL, which really complements the combined Ethernet exposure the two companies will have," says IHS Infonetics research director Jeff Heynen, who specializes in the broadband access and pay-TV markets.
Originally formed as a Hewlett-Packard Co. semiconductor unit in 1961, Avago makes chips for the wireless and corporate data storage markets. It has offices in San Jose, Calif., and Singapore, and it reported $4.3 billion in sales for the fiscal year ending Nov. 2.
Broadcom, meanwhile, saw revenue grow just 1.5 percent to $8.4 billion last year, with the company recently exiting business such as cellular radio.
Bloomberg is billing the merger as the biggest ever in the technology sector.
For more:
- read this Bloomberg Business story
- read this Wall Street Journal story
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