Avago is buying Broadcom for $37 Billion to create a networking chip giant

The combined company will develop chipsets for wired and wireless networks

Avago Technologies has agreed to buy Broadcom in a deal that will create a networking chip giant with a wide variety of products, including components for the burgeoning IoT sector.

It has offered US$37 billion for Broadcom, including $17 billion in cash and equity valued at approximately $20 billion, it said on Thursday. The combined company will offer products for wired and wireless networks.

Both companies' chips are found in wireline and wireless networks. Avago also makes chips for optical networks, while Broadcom's are used in connected home and car equipment and the Internet of Things. It recently announced support for Apple's HomeKit platform, and chipsets for 802.11ac networks.

The companies expect to close the deal by next April, subject to approval from their shareholders and regulators.

The acquisition is just the latest in a period of consolidations large and small for the chip industry: Intel is picking up some custom server chip technology with the acquisition of Altera, while NXP Semiconductors plans to buy Freescale Semiconductor to build a $40-billion company with strengths in automotive electronics and IoT.

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Tags Mergers and acquisitionsbusiness issuesbroadcomAvago Technologies

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Mikael Ricknäs

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