Broadcom is to acquire US software company CA Technologies for $18.9 billion.
According to a statement made by Broadcom, the deal is part of a strategy to acquire "established mission-critical businesses".
The move comes after the US blocked Broadcom's $117 billion bid for semiconductor rival Qualcomm, arguing it was a threat to US national security. In the meantime, Broadcom has based itself in the US from Singapore with headquarters in San Jose, California.
According to Broadcom's president and CEO Hock Tan, the acquisition represents an "important building block" as it tries to "create one of the world's leading infrastructure technology companies".
"With its sizeable installed base of customers, CA is uniquely positioned across the growing and fragmented infrastructure software market, and its mainframe and enterprise software franchises will add to our portfolio of mission-critical technology businesses.," he said.
"We intend to continue to strengthen these franchises to meet the growing demand for infrastructure software solutions."
Mike Gregoire, CA Technologies CEO, said the combination would align his companies "expertise in software with Broadcom's leadership in the semiconductor industry".
Under the terms of the agreement, which has been approved by the boards of directors of both companies, CA's shareholders will receive $44.50 per share in cash.
While Broadcom creates and makes semiconductors used in networking equipment and smartphones, CA Technologies' roots lie in making software for mainframe systems. In the last few decades, the company has broadened its portfolio to include other areas, such as cloud computing, applications development and testing, and database systems management.
According to reports from the Financial Times, shares of CA increased 16% in after-hours trading, but Broadcom shares decreased by 5%.
In a report by Bloomberg, analysts were left pondering how the tie-up would work out. Cody Acree, an analyst at Loop Capital Markets, said that there was a "lack of obvious connection between the two businesses".
-
Manufacturers report millions in losses as downtime wreaks havoc on operationsNews UK manufacturers are losing up to £736 million every week due to downtime, according to new research, with outages lasting for several days on end.
-
Microsoft gives OpenAI restructuring plans the green lightNews The deal removes fundraising constraints and modifies Microsoft's rights to use OpenAI models and products
-
UK firms are pouring money into AI, but they won’t see a return on investment unless they address these key issuesNews An SAP report projects increased AI investment, but cautions that too many organizations are taking a fragmented approach
-
Intel makes high-level hires while factory workers are warned of layoffsNews The company is appointing four senior executives as part of efforts to refocus on engineering and customer relationships
-
UiPath names Simon Pettit as new AVP for UK and IrelandNews The seasoned leader will spearhead region-specific transformation projects as UiPath looks to drive operational growth and customer engagement
-
How to empower employees to accelerate emissions reductionin depth With ICT accounting for as much as 3% of global carbon emissions, the same as aviation, the industry needs to increase emissions reduction
-
Worldwide IT spending to grow 4.3% in 2023, with no significant AI impactNews Spending patterns have changed as companies take an inward focus
-
Report: Female tech workers disproportionately affected by industry layoffsNews Layoffs continue to strike companies throughout the tech industry, with data showing females in both the UK and US are bearing the brunt of them more so than males
-
How can small businesses cope with inflation?Tutorial With high inflation increasing the cost of doing business, how can small businesses weather the storm?
-
How to deal with inflation while undergoing digital transformationIn-depth How can organizations stave off inflation while attempting to grow by digitally transforming their businesses?
