Chipmaker Broadcom nears $19 billion deal to buy software company CA: sources

11 Jul, 2018

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(Reuters) – Broadcom Ltd is nearing a roughly $19 billion deal to acquire business software company CA Inc, as it seeks to diversify its technology offerings beyond semiconductors, people familiar with the matter said on Wednesday.

FILE PHOTO: A sign to the campus offices of chip maker Broadcom Ltd, who announced on Monday an unsolicited bid to buy peer Qualcomm Inc for $103 billion, is shown in Irvine, California, U.S., November 6, 2017. REUTERS/Mike Blake

The deal would come just four months after U.S. President Donald Trump blocked Broadcom’s $117 billion hostile bid for semiconductor peer Qualcomm Inc, on the grounds that it posed a threat to U.S. national security.

Since then, Broadcom has redomiciled from Singapore to the United States, placing it formally outside the purview of the Committee on Foreign Investment in the United States (CFIUS), the government panel that reviews deals for potential national security risks.

The deal, which will value CA at $44.50 per share, is expected to be announced later on Wednesday, the sources said, asking not to be identified ahead of an official announcement. CA shares ended trading on Wednesday at $37.21.

Broadcom and CA did not immediately respond to requests for comment. The Wall Street Journal first reported on the deal.

Broadcom, under its dealmaker chief executive, Hock Tan, has been on an acquisition spree as some of its major customers, such as Apple Inc and Samsung Electronics Co Ltd look to consolidate supplier relationships and slash costs. Private equity firm Silver Lake is also an investor in Broadcom, which has a market capitalization of $105 billion.

CA, formerly known as Computer Associates, has its roots in providing mainframe computers used by banks and other large institutions. It has been shifting much of its business to the cloud to become more competitive with corporate customers.

Last year, CA held talks to merge with private equity-owned peer BMC Software. After these talks fell through, BMC agreed to sell itself earlier this year to private equity firm KKR & Co LP for $8.5 billion.

Reporting by Greg Roumeliotis in New York; Editing by Jonathan Oatis

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