Published: Thu, July 12, 2018
Money | By Ralph Mccoy

Broadcom agrees to buy CA Technologies for $19 billion

Broadcom agrees to buy CA Technologies for $19 billion

The company announced on Wednesday an all-cash deal to buy CA Technologies, a software firm based in New York City, for $18.9 billion, with CA investors receiving $44.50 per share. Based on CA's closing price of $37.21 Wednesday, the offer represents a 20 percent premium for CA shareholders.

Under Chief Executive Officer Hock Tan, Broadcom has transformed itself through a string of acquisitions into one of the world's largest chipmakers.

Broadcom said it intends to fund the deal with cash on hand and US$18 billion in new debt financing.

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The CA deal, outlined in a joint statement from the companies, comes just four months after U.S. President Donald Trump blocked Broadcom's $117 billion hostile bid for semiconductor peer Qualcomm on national security grounds. CA Technologies sells the software behind database mainframes, cloud computing systems and virtual machine environments. Shares of Broadcom were down over 5.5%.

CA Technologies stock soared almost 16 percent in after-hours trading to US$43.10 per share following the Broadcom acquisition news. Trump said there is "credible evidence" that Broadcom's proposed move to exercise control of Qualcomm "might take action that threatens to impair the national security of the United States".

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