Broadcom Eyes CA Technologies for $19B After Trump Axed Qualcomm Bid

Semiconductor maker Broadcom, which ended its effort to buy competitor Qualcomm earlier this year, has a new target: New York-based business software maker CA Technologies.

The pair announced Wednesday that Broadcom (NASDAQ: AVGO), which moved its headquarters from Singapore to San Jose, CA, earlier this year, plans to pay $18.9 billion in cash for CA Technologies (NASDAQ: CA), which makes software and provides services for everything from IT management to app development to cybersecurity. The deal follows a failed takeover attempt by Broadcom of San Diego-based chipmaker Qualcomm, which President Trump unilaterally denied in March, citing national security concerns. The $100 billion-plus proposed acquisition would have represented the largest tech deal in history.

Now, Broadcom has set its sights on a smaller, but still significant, purchase. We’ll see whether the deal faces the same scrutiny from regulators, although early reports from The New York Times and Bloomberg suggest it might not. Others reports have questioned how well the two businesses fit together, since CA Technologies’ enterprise software business is a bit outside of Broadcom’s typical product line.

Broadcom and CA Technologies’ combination extends into Boston, too: In 2017, Veracode agreed to sell to CA Technologies for $614 million in cash. The Burlington, MA-based company is one of the stalwarts of the local cybersecurity cluster and hunts for vulnerabilities in software by scanning it throughout the development lifecycle.

In February, Broadcom began “evaluating its options” regarding the Qualcomm bid after Qualcomm raised its offer to buy competing chipmaker NXP Semiconductors (NASDAQ: NXPI), which is based in The Netherlands. Qualcomm increased its offer for NXP to $44 billion, from $110 per share to $127.50 apiece. At the time, Broadcom said the acquisition would transfer value from Qualcomm stockholders to NXP shareholders. Qualcomm’s move was seen by some as defending against Broadcom’s takeover attempt. Qualcomm and NXP are still trying to close the deal.

David Holley is Xconomy's national correspondent based in Austin, TX. You can reach him at dholley@xconomy.com Follow @xconholley

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