Broadcom agrees to buy CA Technologies for $19 billion

Irving Hamilton
July 12, 2018

Broadcom is close to closing an $18 billion acquisition of CA Technologies, an American software company, according to the Wall Street Journal.

Broadcom offered $44.50 a share in cash for CA, formerly known as Computer Associates, the companies said Wednesday.

With CA in the fold, the new Broadcom will derive 28 percent of revenue from software from nothing today.

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"This transaction represents an important building block as we create one of the world's leading infrastructure technology companies", Broadcom CEO Hock Tan said in a statement. Last year, Tan launched an ambitious attempt to grow even bigger - through the purchase of rival mobile-chip maker Qualcomm Inc.

The CA deal comes just four months after Broadcom's bid to buy Qualcomm for a whopping US$121 billion was shut down by U.S. president Donald Trump who citing national security concerns. CA Technologies sells the software behind database mainframes, cloud computing systems and virtual machine environments.

CA Technologies stock was up over 16% in after-hours trading immediately following the announcement of the deal. After the rejection of its Qualcomm bid, the San Jose, California-based company - which relocated its headquarters to the USA from Singapore earlier this year - had said it would probably avoid large purchases and concentrate on returning cash to shareholders in the form of stock buybacks and dividends.

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