Avago agrees to buy LSI for $6.6 billion

Avago looks to ride the wave of growing mobile traffic with LSI acquisition

Semiconductor company Avago Technologies has agreed to buy storage and networking company LSI for US$6.6 billion in an effort to expand its data center offerings.

The deal involves Singapore-based Avago paying $1 billion in cash, an equity investment of $1 billion by Silver Lake Partners and $4.6 billion in term loans from banks.

The combined company will be positioned for growth in the data center business with mobile traffic increasing at a fast pace, the companies said in a joint statement.

The growth in mobile traffic has increased the demand for networking equipment, with more of the data processing load falling on data centers.

Avago is mainly known for its equipment such as actuators and microelectromechanical systems (MEMS) used in industrial, automotive. lighting and consumer equipment, but also offers embedded chips for wireless base stations and networking equipment in data centers. Some of Avago's competitors include Texas Instruments, Analog Devices and Fairchild Semiconductor.

LSI already offers hardware equipment for data centers, including flash storage, network processors, controllers and other products, with Mellanox and Intel being top competitors.

The acquisition of LSI also helps Avago expand its offerings in the wired infrastructure of data centers, said Hock Tan, president and CEO of Avago, in a statement.

But wireless networking assets seem to be a big focus. Earlier on Monday Intel acquired the wireless networking assets of MindSpeed Technologies for an undisclosed sum.

The Avago-LSI deal is expected to close in the first half of 2014 and is subject to customary conditions and regulatory approvals.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com

Join the newsletter!

Or
Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags Mergers and acquisitionsbusiness issuesLSIComponentsAvago Technologies

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?