By Dana Mattioli, Dana Cimilluca and Shayndi Raice
Broadcom Corp. is in advanced talks to be bought by Avago
Technologies Ltd., in what would be the latest in a recent string
of mergers in the semiconductor industry.
It isn't clear what terms the companies are discussing or when a
deal could be inked--if there's one at all--but Broadcom had a
market value of $28 billion as of Wednesday afternoon. Avago's was
about $34 billion.
Broadcom shares surged 16% to $54.32 in recent trading, while
Avago rose 5.2% to $138.16.
Broadcom, based in Golden, Colo., makes chips for about half of
the world's tablets and smartphones. The company was founded in
1991, and counts Amazon.com Inc., Apple Inc. and DirecTV as
customers, according to the company's website. Broadcom had $8.4
billion in sales in 2014.
Avago designs, develops and supplies analog, digital and mixed
signal chips geared toward the wireless-communications and
enterprise-storage markets, according to its website. The company
was founded in 1961 and is based in San Jose, Calif., and
Singapore.
The semiconductor sector has been consolidating at a fast clip
this year. In April, NXP Semiconductors NV agreed to buy Freescale
Semiconductor Ltd. in an $11.8 billion deal. Intel Corp. is in
talks to buy Altera Corp., which has a $14 billion market
value.
Meanwhile, Qualcomm Inc. has come under pressure from activist
investor Jana Partners LLC, which is pushing the chip giant to
pursue a breakup, among other actions.
Write to Dana Mattioli at dana.mattioli@wsj.com, Dana Cimilluca
at dana.cimilluca@wsj.com and Shayndi Raice at
shayndi.raice@wsj.com
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