Broadcom pursues talks to buy Symantec: report

Broadcom HQ
If Broadcom buys Symantec, it might integrate cybersecurity software into chips.

Broadcom is reportedly in talks to buy cybersecurity firm Symantec within weeks, according to sources that spoke with Bloomberg.

Neither company would comment publicly. In early trading on Wednesday, Symantec’s shares rose 15% to $25.43. The company topped $4 billion in revenues in 2017 and has more than 12,000 workers. Its market value is more than $14 billion.

Broadcom’s stock dropped 3% in early trading Wednesday to $285.92. Its market value is more than $110 billion. The company is one of the biggest U.S. chipmakers, with a broad portfolio that includes software products. Revenues in 2018 were $20.8 billion.

Fierce AI Week

Register today for Fierce AI Week - a free virtual event | August 10-12

Advances in AI and Machine Learning are adding an unprecedented level of intelligence to everything through capabilities such as speech processing and image & facial recognition. An essential event for design engineers and AI professionals, Engineering AI sessions during Fierce AI Week explore some of the most innovative real-world applications today, the technological advances that are accelerating adoption of AI and Machine Learning, and what the future holds for this game-changing technology.

In its second quarter financial statement of June 13, Broadcom announced revenues of $5.5 billion, up 10% from a year earlier. That included contributions from CA Technologies, purchased by Broadcom in 2018 for $18.9 billion in cash. Broadcom expected $22.5 billion in revenues for fiscal 2019, ending Nov. 3, but then shortly later said revenues would be $17.5 billion due to the economic and political uncertainty over U.S.-China trade tensions. 

RELATED:"Broadcom's dramatic guidance forecast chills chipmakers"

Analysts predicted Broadcom CEO Hock Tan would need to cut costs if the Symantec acquisition moves ahead. Symantec would be a “perfect fit” for Broadcom, Piper Jaffray analyst Harsh Kumar said in a note to investors. He also called the CA acquisition “extremely successful.” Wedbush analyst Dan Ives said Symantec could be a “cash cow machine on the consumer front” for Broadcom.

Tan played a role in helping consolidate the chip industry in recent years and was behind the hostile attempt to buy rival Qualcomm for $117 billion before U.S. President Donald Trump blocked the transaction in March of 2018 citing national security.

Symantec seems ripe for the picking, with the quick departure of CEO Greg Clark on May 9. Shares dropped 33% in 2018 after a financial investment led to restated earnings, but gained back about half those losses in 2019.

If history is any guide, it could be interesting for chipmaker Broadcom to buy a security software company like Symantec. Intel bought security firm McAfee in 2011 for $7 billion and then ended up spinning it off in 2016 to TPG for about $4 billion. Intel had wanted to integrate McAfee security software into Intel’s PC processors.


Suggested Articles

Silicon Labs is providing the BT module needed for detecting proximity with another Maggy device

Test automation won't fix everything, but can help, according to an automation engineer. Here are five problems to avoi to improve chances of success

Many of Nvidia’s competitors also use Arm designs, and are sure to object to the deal