Broadcom is Reportedly Very Close to Acquiring Symantec Corporation
Published on July 3, 2019
- Broadcom Inc. may soon announce the acquisition of Symantec Corporation for an undisclosed amount.
- The chipmaker giant is still working towards entering the growing software market.Â
- Analysts see this as an excellent strategic move by Broadcom, while Symantec enjoys market price rise thanks to the rumors.
According to a Bloomberg report, Broadcom Inc. is soon to buy the California-based cybersecurity firm Symantec, as the deal is reportedly soon to be finalized. Although there’s always a chance of the deal falling through, unnamed sources claim that the probabilities of this happening are low at this point. The American semiconductor manufacturing giant is looking to enter the growing market of cyber-security software solutions with impetus, as they see vast profit potential in it. The apparently imminent acquisition will occur within this very context, as Broadcom hopes that Symantec’s extensive expertise in the field will help them secure the technical part of their business plan.
This is a plan that Broadcom has been working on since last year when they spent $18 billion to buy CA Technologies, an enterprise software expert based in New York. With Symantec, Broadcom will welcome aboard a company that fits their portfolio perfectly, while also allowing the former to breathe some fresh air following a rough period filled with problems on all levels. Symantec remains headless since last year, faces fierce competition from other players in the field, and recently became the subject of financial investigations that didn’t come up with the best results. All this combined resulted in the dropping of the share prices last year, but the company remained a high-profile vendor of products and services for Fortune 100 companies and many thousands of organizations around the world.
This means that the acquisition comes at an ideal time for Broadcom if it is indeed completed as expected, but one key element of the deal remains unknown, and that is the acquisition cost. Right now, and with the rumors of the acquisition raging, the shares of Symantec are climbing up in value, and so does the market value of the cybersecurity firm which is now at $13.7 billion. Obviously, the fact that the private discussions have gone public isn’t helping Broadcom reaching an agreement that would be the most beneficial for their own interests, but the story is the opposite for Symantec.
As Bloomberg points out, the success of acquisitions of this kind is never guaranteed and presents Intel as a characteristic example of that. Back in 2011, Intel bought McAfee Inc. for $7.7 billion but failed to make anything useful out of this move, selling the security unit six years later for only $4.2 billion.
Do you think that Broadcom is making the right move here, or are they likely to have the Intel – McAfee fate? Let us know where you stand in the comments down below, or on our socials, on Facebook and Twitter.
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