Broadcom has secured financing and recognized cost savings for the purchase of Symantec in an all-cash deal that could value the cyber-security firm at more than $22 billion including debt, according to people knowledgeable about the matter.
The chipmaker received financing commitments from several banks and sees yearly synergy potential of roughly $1.5 billion (approximately Rs. 10,300 crores), said the people, who asked to not be identified because negotiations are confidential. An arrangement could be reached round mid-July, although the talks may also still drag or fall apart, the people said.
Separately, Symantec has drawn interest from the former chief executive officer, Greg Clark, who has teamed up with buyout firms Advent International and Permira Holdings in an attempt to muster a competing offer, said the people. The team thus far has been not able to compete on price with Broadcom, making the pursuit a very long shot, they stated.
A takeover of the Mountain View, California-based company would mark Broadcom’s second big bet in applications, after its $18 billion purchase last year of CA Technologies. That transaction spurred some investors to express concern that CEO Hock Tan’s acquisition strategy was being stretched too much after playing a crucial role in consolidating in the $470 billion chip industry.
That deal also came after San Jose, California-based Broadcom abandoned a hostile pursuit of rival chipmaker Qualcomm, when US President Donald Trump blocked the transaction citing national security dangers.
Symantec’s stocks have gained 13 percent since July 3 after Bloomberg News first reported that the takeover talks, providing the company a market value of roughly $15.5 billion. Broadcom has fallen about 4.3% in that period of time, valuing it at about $113 billion.
Symantec plunged on May 10 following a soft forecast and the primary executive’s abrupt departure stoked investor worries.