Broadcom has agreed to buy software maker CA Technologies for about $19 billion, an acquisition that suggests the chipmaker is ready to branch out in a new direction.
Broadcom offered $44.50 a share in cash for CA, formerly known as Computer Associates, the companies said Wednesday. Based on CA’s closing price of $37.21 Wednesday, the offer represents a 20 percent premium for CA shareholders.
“This transaction represents an important building block as we create one of the world’s leading infrastructure technology companies,” Broadcom CEO Hock Tan said in a statement. “With its sizable 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.”
The acquisition was announced almost four months to the day after Broadcom’s proposed $117 billion acquisition of rival chipmaker Qualcomm was on national security grounds. Broadcom, which makes chips for everything from cable modems to set-top boxes and digital video recorders, was based in Singapore at the time but has since moved its operations to San Jose, California.
The proposed merger of the two companies was billed as the largest-ever tech acquisition, creating a chip giant that could supply components to a wide array of electronic gadgets found in your home or pocket. CA was founded in 1976 and formerly created internet security programs for PCs but now derives most of its revenue from software tools for mainframe, distributed computing and cloud computing environments.
The deal, still subject to regulatory and shareholder approval, is expected to close in the fourth quarter.
Cambridge Analytica: Everything you need to know about Facebook’s data mining scandal.
iHate: CNET looks at how intolerance is taking over the internet.