Broadcom to acquire NetLogic for about $3.7B

Sep 12, 2011

(AP) -- Broadcom Corp. said Monday it has agreed to acquire NetLogic Microsystems Inc. for about $3.7 billion in cash.

Broadcom designs chips that are used in products ranging from cable boxes to cell phones. It says NetLogic will extend its product line with a number of new processors.

Netlogic's chips are used in computer networking equipment such as switches, routers, wireless base stations and data storage devices. Its customers include Cisco Systems Inc. and Hewlett-Packard Co.

The purchase price works out to $50 per share, a 57 percent premium to NetLogic's closing price of $31.91 on Friday.

Shares of Netlogic, based in Santa Clara, Calif., climbed 51 percent, or $16.26, to $48.17 Monday.

Broadcom shares fell, $1.02, or 3 percent, to $32.42 by mid-afternoon.

The transaction has been approved by both companies' boards. It still needs regulatory clearance in the U.S., Taiwan and China, but it is expected to close in the first half of next year.

Broadcom expects the acquisition to boost earnings by about 10 cents per share next year.

Broadcom based in Irvine, Calif., also said it expects third-quarter revenue to fall in the middle of a previously announced range of $1.9 billion to $2.0 billion. Analysts polled by FactSet expect $1.95 billion.

Explore further: Apple counters talk it will shut Beats music service (Update)

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Broadcom launches hostile $764M bid for Emulex

Apr 21, 2009

(AP) -- Chip designer Broadcom Corp. is launching a $764 million hostile takeover offer for network gear maker Emulex Corp. Broadcom said Tuesday the deal would help it develop new technologies for corporate data centers.

Qualcomm 3Q results beat Wall Street estimates

Jul 20, 2011

(AP) -- Wireless chip-maker Qualcomm Inc.'s results for the latest quarter beat Wall Street's expectations, and its projections for the current quarter are also above analysts' estimates.

Qualcomm posts 2nd-qtr loss on legal settlement

Apr 27, 2009

(AP) -- Qualcomm Inc. posted a fiscal second-quarter loss Monday on a hefty payment to rival chip maker Broadcom Corp. to end legal disputes that spanned several continents.

Recommended for you

Line says no IPO this year

22 hours ago

The Japan-based operator of popular mobile messaging app Line said Monday it has decided not to go ahead with an initial public offering in Japan or overseas this year.

User comments : 0