Broadcom in talks to purchase SymantecАнна Saveliev | 04.07.2019
Broadcom is currently in “preliminary negotiations” about purchase of the Symantec Corporation, the parent company of the popular antivirus software Norton. This step will help Broadcom
to diversify their businesses and to develop software. But the deal is not yet done, plans can change. Previously the amount of 15 billion
dollars, but there is a possibility of its increase. Broadcom sees the software as a more profitable arena for expansion.
The current strategy of interest to the software infrastructure that will support internal operations for business. To some extent this was influenced by
a failed attempt to buy Qualcomm. Recall that prior to this, Donald trump has issued a presidential decree banning the purchase of Broadcom Qualcomm for $130 billion, for reasons of national security.
The administration of the trump expressed concern that the deal could result in the loss of the state championship in the semiconductor and wireless industry, and will enable China to overtake the United
States in wireless networks of the next generation.
Since Broadcome and went to purchase. A year ago it acquired the us company to develop software for business CA for $18.9 billion. After a conversation with Finance Director
Broadcom Thomas Krause Morgan Stanley analyst Craig Hettenbach noted that the acquisition of CA already gives you a 14% return on investment. Thus, the change of the strategy have been successful for the company.
Shares of Symantec rose by 22% during the discussion of the forthcoming transaction, while Broadcom falls 4%, with the result that it fell by $5 billion, the stock of Symantec and Broadcom have rank
Zacks # 3 (hold).
Symantec is one of the largest companies in the world on cyber security, but in recent years it has been in a difficult situation and is facing increased competition from such
organizations like Cisco and Palo Alto Networks. On the one hand, corporate customers are turning to cloud-based providers, and on the other for new players offering mobile security. In some
cases, competitors are distributing consumer products that were originally sold by Symantec. In addition, there have been a number of changes to its management team: in may has left Director General Greg
Clark, causing a sharp drop in the stock, and Richard hill became President and chief Executive officer. It is also worth to mention the recent internal investigation of irregularities in accounting,
complicating the situation.
The company was founded in 1982 and is based in Silicon valley. In 2016, in an attempt to improve their business, it has acquired LifeLock, which specializiruetsya to protect consumers from identity theft
data for 2,3 billion dollars. For a long time Symantec was focused on software to combat computer viruses, but later she went to the other segments
the enterprise software market, including with the purchase of Veritas Software in 2005 for 13.5 billion dollars. In the same year, Symantec has agreed to make a deal at 4.65 billion
dollars to purchase Blue Coat products which included blocking access of employees to dangerous web sites. Under this deal, the investors Silver Lake and Bain Capital agreed
to invest in Symantec and chief Executive officer Blue Coat, Greg Clark, took office.
At the end of 2017, Symantec estimated $6 billion more than it is willing to pay now. In August 2018 it has reduced its global staff by 8%, and in the end, its shares fell by 33%. In
2019, the company managed to raise them by 17%.
Broadcom was registered in 1991 in Singapore, and was based there for most of its history. Manages the Executive Director hock tan. In anticipation of attempts to acquire
Qualcomm, the company announced that it will move its headquarters in San Jose, California. Earlier the organization was called Avago, but changed its name after the acquisition in 2015, Broadcom in 37
of billions of dollars.
The first sign that Mr. Tang was open to buy neprivodimykh enterprises, appeared in 2016, when Broadcom bought for $ 5.5 billion Brocade, which has produced
computer network equipment.
Mr. tan said that he likes to buy Mature companies with large, established franchises that generate stable cash flows. Then he doubles the larger
profitable segments, so they can hold the lead. The company has always operated as an independent division of Broadcom, the products with each other are not integrated.
The deal is Broadcom-Symantec will be the second major acquisition of a provider of cybersecurity chip manufacturer after Intel buying McAfee in California in 2011. However, Intel sold
a controlling stake (51%) McAfee investment firm TPG, and not by the intention to integrate the protection of McAfee in their processors.
the company
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Broadcom, Symantec
