Avago Technologies and Broadcom, this week announced that both companies have entered into an agrrement that will see Avago acquiring Broadcom for $37 billion that will create a diversified global leader in wired and wireless communication semiconductors. Avago intends to fund the purchase price with cash on hand from the combined companies and $9 billion in new, fully-committed debt financing from a consortium of banks.
According to a joint statement, upon completion of the acquisition, the combined company will have the most diversified communications platform in the semiconductor industry, with combined annual revenues of approximately $15 billion.
Following completion of the transaction, Hock Tan, President and Chief Executive Officer of Avago, will continue to serve as President and Chief Executive Officer of the combined company, which will adopt the name Broadcom Limited.
Hock Tan, President & CEO, Avago
Today's announcement marks the combination of the unparalleled engineering prowess of Broadcom with Avago's heritage of technology from HP, AT&T, and LSI Logic, in a landmark transaction for the semiconductor industry. The combination of Avago and Broadcom Avago has esablished a strong track record of successfully integrating companies onto its platform. Together with Broadcom, we intend to bring the combined company to a level of profitability consistent with Avago's long-term target model.
Scott McGregor, President & CEO, Broadcom
This transaction benefits all of Broadcom's key stakeholders. Our customers will gain access to a greater breadth of technology and product capability. For our shareholders, the transaction provides both compelling up-front value as well as the opportunity to participate in the future upside of the combined business.
