Broadcom announced that it is going to be acquiring CA Technologies for around $18.9 billion in a cash offer, instead of offering up stock. If this deal is approved, it would be a big win for Broadcom, after it was blocked from its hostile takeover of Qualcomm earlier this year. This deal between Broadcom and CA Technologies values the latter at $44.50 per share, which is about a premium of around 20-percent of the closing price on CA yesterday. However it did rise around 17-percent in after hours trading, and early trading on July 12.
This acquisition would continue Broadcom's strategy to acquire more companies, especially after it failed to purchase Qualcomm. CA Technologies isn't as well-known as Qualcomm in these parts, but it is a company that manufactures cloud-based and traditional enterprise software. This deal would help Broadcom diversify its businesses. Although, Broadcom is going to need to gain approval from the US, European Union and Japan, before this deal can be finalized. However, the boards of both Broadcom and CA Technologies have already approved the deal. So the final step here would be antitrust regulator approval for the deal.
Broadcom is actually a US company, once again, after having moved its headquarters to the US in San Jose, California. It actually started out as a US company, then moved its headquarters to Taiwan, but now it is back in the US. Which means that regulatory approval should be much easier this time around, compared to when the company was looking to purchase Qualcomm. At the time, it was seen as a Chinese company looking to purchase an American company that has a vast portfolio of patents. Something that President Trump was not a fan of – after all, he wants China to stop stealing intellectual property, which is why he blocked Broadcom from even attempting to purchase Qualcomm.