Broadcom to Buy Symantec's Enterprise Unit for $10.7 Billion in Software Push
Tan's strategy has been to acquire "franchises", groups or businesses within companies that have sustainable market positions through technology leadership.
The deal, which includes the Symantec name, is the "next logical step" for Broadcom following its acquisitions of Brocade and CA Technologies, the company reckons, and will help it to expand its enterprise software offering; now, the company faces stiff competition in the market offering protection to mobile devices and is absent from areas such as security forensics and investigation.
But Broadcom returned to the negotiating table with an offer to buy Symantec's enterprise security business instead, which accounts for about half of the company's $5 billion annual revenues. "We look forward to expanding our footprint of mission critical infrastructure software within our core Global 2000 customer base".
Symantec said the deal would allow it to focus its efforts on consumer security products.
Constellation Research Inc. analyst Holger Mueller said Broadcom's interest in Symantec stems from a need to diversify itself as its main computer chip business is in decline.
The company will carve out "more than US$1 billion of run-rate cost synergies within 12 months following close", it said in the statement. Additionally, Broadcom expects to achieve double-digit cash-on-cash returns on its investment.
Man dies 2 months after being deported from U.S. to Iraq
Reuters reported Iraq agreed to accept deportees and more than 100 Iraqis were arrested that month in Detroit . But finding the medical treatment he needed was virtually impossible, he said. "He couldn't get insulin".
Symantec's enterprise offerings include endpoint security, web security services, cloud security and data loss prevention solutions. It plans to raise fresh debt to fund the deal.
Broadcom expects its current dividend policy of delivering 50% of its prior fiscal year free cash flow to shareholders to remain unchanged. Broadcom stock moved up about 1% in after-hours trading.
The deal, which is expected to close in Broadcom's fiscal first quarter ending in January, comes less than a month after the two companies' discussions for a full merger fell apart over disagreements about the price.
Symantec's enterprise security business, on the other hand, is merging with Broadcom, a supplier of semiconductors, ethernet switches and data center technologies.
Broadcom failed a year ago, while it was still based in Singapore, in a hostile takeover attempt of U.S. mobile chip giant Qualcomm after the White House blocked the deal on national security grounds.
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