Avago, Broadcom Deal Reportedly to Get European OK

By Jeffrey Burt  |  Posted 2015-11-04 Print this article Print
tech business

Avago Technologies' $37 billion acquisition of chip maker Broadcom reportedly is about to clear a significant regulatory hurdle.

Antitrust regulators with the European Union are getting ready to give the massive deal unconditional approval, unnamed sources told Reuters. Avago officials had offered concessions to the European Commission Oct. 30, but according to the sources, the concessions won't be needed. The commission has extended its deadline for a decision on the deal from Nov. 9 to Nov. 23.

U.S. regulators in August gave their approval to the deal, one of several in a consolidating semiconductor market. Officials with both companies announced the acquisition in May, looking to create a combined company worth $77 billion with annual revenue of about $15 billion that will be better positioned to compete with the likes of Qualcomm and Samsung.

The vendors will combine their capabilities—Avago in industrial and networking systems and Broadcom in consumer devices—to drive their chips into the rapidly growing number of connected devices worldwide, from smartphones and tablets to industrial systems, sensors, embedded appliances and other systems that will make up the Internet of things (IoT). The new company will be called Broadcom Ltd.

The deal is expected to close in the first quarter of 2016.

Avago's acquisition of Broadcom is the largest of several deals in the semiconductor industry over the past year as chip makers push to expand their capabilities in a fast-changing and increasingly mobile world. Intel in June announced it was buying Altera, which makes field-programmable gate arrays (FPGAs) that are becoming increasingly important as accelerators in cloud and Web-scale environments. FPGAs can be programmed through software and improve system performance while keeping power consumption down.

Intel officials said Altera, which owns about 40 percent of the FPGA market, will enable the company to better address emerging cloud workloads by integrating the FPGAs into its Xeon server chips. Intel is expecting that by 2020, a third of all workloads run by cloud service providers will leverage FPGAs.

Other deals in the industry have included NXP Semiconductors in March announcing its intent to buy Freescale Semiconductor for about $12 billion and Qualcomm, the world's top mobile device chip maker, buying British chip maker CSR for $2.5 billion, a move to boost its capabilities in the IoT.


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