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The deal will create a major supplier of communications chips with annual revenues of approximately $15bn, around $8bn of which belong to Broadcom.
This would make it larger than Texas Instruments comms business but smaller than market leading wireless chip supplier Qualcomm.
The combined company will adopt the Broadcom name.
“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,” said Hock Tan, president and CEO of Avago.
According to Scott McGregor, president and CEO of Broadcom, the deal will give the company access to “a greater breadth of technology and product capability”.
Following completion of the transaction, Avago CEO Tan will continue to serve as president and CEO of the combined company. Dr. Samueli will be appointed Chief Technology Officer of the combined company. Dr. Nicholas will serve in a strategic advisory role within the combined company, reporting to Mr. Tan.
Under the terms of the definitive agreement, Avago will acquire Broadcom for $17bn in cash and a share transaction valued at $37bn.
“The culture that Henry and I created when we founded Broadcom was demanding, execution-oriented, and certainly not guaranteed to mesh with the average technology company,” said Dr. Henry T. Nicholas, Co-founder and past CEO of Broadcom.
“It was, however, a culture that enabled Broadcom to grow exponentially and emerge as the market leader in every major market segment involving broadband communications. In Avago, we have found a culture and a management team that embody the best of the philosophies on which Broadcom was founded, together with a fast-paced, no-nonsense, process-driven business culture that we need to take our combined company to the next level. I am confident that, under the visionary leadership of Hock Tan, the combined company will realize its potential to be the world’s greatest semiconductor company.”
Read Broadcom’s official statement »
Read Avago’s official statement »
