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© joingate dreamstime.com Business | May 29, 2015

Avago to acquire Broadcom in a $37 billion deal

Avago Technologies Limited and Broadcom Corporation has announced that they have entered into a definitive agreement under which Avago will acquire Broadcom in a cash and stock transaction.
This values the combined company at USD 77 billion in enterprise value.

"The combination of Avago and Broadcom creates a global diversified leader in wired and wireless communication semiconductors. Avago has established a strong track record of successfully integrating companies onto its platform. Together with Broadcom, we intend to bring the combined company to a level of profitability consistent with Avago's long-term target model," said Hock Tan, President and Chief Executive Officer of Avago

"This transaction benefits all of Broadcom's key stakeholders," remarked Scott McGregor, President and Chief Executive Officer of Broadcom. "Our customers will gain access to a greater breadth of technology and product capability. For our shareholders, the transaction provides both compelling up-front value as well as the opportunity to participate in the future upside of the combined business."

Under the terms of the definitive agreement, Avago will acquire Broadcom for USD 17 billion in cash consideration and the economic equivalent of approximately 140 million Avago ordinary shares, valued at USD 20 billion as of May 27, 2015, resulting in Broadcom shareholders owning approximately 32% of the combined company. Based on Avago's closing share price as of May 27, 2015, the implied value of the total transaction consideration for Broadcom is USD 37 billion.
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