Broadcom In Negotiations To Acquire Semiconductor Giant Symantec For $15 Billion

Alan Masterson - July 5, 2019

Broadcom Inc. (NASDAQ:AVGO) is in discussions to acquire Symantec Corporation (NASDAQ:SYMC) as part of the company’s shift in the strategy of diversifying beyond semiconductors. This comes after a failed bid to acquire Qualcomm Inc. (NASDAQ: QCOM). The deal is expected to expand the company’s diversification into software a year after acquisition CA Inc. for around $19 billion.

Acquisition of Symantec could cost $15 billion

Symantec is an antivirus software maker among other software products and any deal for its acquisition is likely to be over $15 billion. Sources privy with the ongoing discussions indicated that the transaction could be completed in the coming days. They, however, warned that these are discussions that are ongoing that could also not fall through.

The information could not be confirmed by a Symantec spokeswoman who declined to comment on the matter while a Broadcom representative could also not comment immediately.

If the deal is finalized and Broadcom acquires Symantec it will be a big statement regarding the company’s change in strategy to after its $117 billion bid for the acquisition of Qualcomm fell through last year. Broadcom faced opposition from the Trump administration regarding the deal for Qualcomm which could have potentially ceded US’s primacy in the wireless and chip industry which was to permit China to vault over the nation in future generation wireless networks.

Broadcom CEO focuses on the acquisition of established businesses

Hock Tan the CEO of Broadcom has led some successful deals before and he led the acquisition of Broadcom as Avago CEO for $37 billion which brought the two companies together under Broadcom. Tan likes buying mature companies that can generate stable cash flows and then spinning off speculative and less attractive businesses to double down on profitable segments. The Broadcom-Symantec transaction is the second such acquisition by a chipmaker for cybersecurity provider following the acquisition of McAfee by Intel Corp. (NASDAQ: INTC) back in 2011.

Broadcom is focused on the acquisition of software businesses and according to Tom Krause the Company CFO the company is targeting the acquisition of infrastructure software that is vital in powering back-end business operations.

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Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email ([email protected]) or his Google+ page (https://plus.google.com/103338576216002376250).

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