Market Overview

Broadcom Soars 20% Amid News Of Deal With Avago Technologies

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Shares of Broadcom Corporation (NASDAQ: BRCM) soared over 20 percent Wednesday following a report that it would be bought by Avago Technologies Ltd (NASDAQ: AVGO).

The Wall Street Journal reported that the two companies were in advanced talks, however, timing and the value of a possible deal were unknown.

Broadcom, founded in 1991, is based in Golden, Colorado and makes chips for about half of the world’s tablets and smartphones, according to the report.

Broadcom also counted Amazon.com, Inc. (NASDAQ: AMZN), Apple Inc. (NASDAQ: AAPL) and DIRECTV (NASDAQ: DTV) as customers and brought in $8.4 billion in sales in 2014, the report noted.

According to Avago’s website, the company was founded in 1961 and is based in San Jose, California and Singapore with a product portfolio that “serves four primary target markets: wireless communications, enterprise storage, wired infrastructure, and industrial and other.”

Applications for Avago’s products in the above target markets included “cellular phones and base stations, data networking, storage and telecommunications equipment, factory automation, power generation and alternative energy systems, and displays.”

The WSJ report noted the semiconductor sector had been “consolidating at a fast clip this year” with NXP Semiconductors NV (NASDAQ: NXPI) agreeing to buy Freescale Semiconductor Ltd (NYSE: FSL) in an $11.8 billion deal while Intel Corporation (NASDAQ: INTC) is in talks to buy Altera Corporation (NASDAQ: ALTR).

Avago Technologies Ltd was also moving higher Wednesday and recently traded at $143.66, up 9.41 percent.

Broadcom Corporation traded at $56.95 Wednesday afternoon, up 21.38 percent.

 

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Posted-In: The Wall Street JournalM&A News Rumors