Avago Technologies buying LSI for $6.6B (Update)

Dec 16, 2013

The chipmaker Avago Technologies Ltd. is buying LSI Corp. for $6.6 billion to help strengthen its position in the enterprise storage market and broaden its offerings.

Shares of both companies surged Monday.

LSI shareholders will receive $11.15 per share, a 40 percent premium to the San Jose, California, company's Friday closing price of $7.94.

"This combination will increase the company's scale and diversify our revenue and customer base," Avago President and CEO Hock Tan said in a statement.

The transaction is expected to significantly and immediately add to Avago's adjusted earnings per share. The company, which is based in San Jose, California, and Singapore, said that it plans to fund the acquisition with $1 billion of cash as well as a $4.6 billion term loan from a group of banks and a $1 billion investment from the private equity firm Silver Lake Partners.

Silver Lake Partners teamed with Michael Dell for the $24.9 billion acquisition of Dell Inc. Avago said that Silver Lake's investment for the LSI transaction is expected to be a seven-year, 2 percent convertible note.

Avago expects $200 million in annual operating savings by fiscal 2015's end.

Both company's boards approved the deal, which still needs approval from LSI shareholders.

The transaction is targeted to close during the first half of 2014.

Shares of LSI jumped $3.05, or 38.6 percent, to close at $10.96. Avago's stock rose $4.45, or 9.8 percent, to $50.10.

Explore further: Dell: Investors offer short by $3.9B

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

Related Stories

Dell: Investors offer short by $3.9B

Jun 05, 2013

Dell says a buyout offer from shareholder Southeastern and billionaire investor Carl Icahn is about $3.9 billion short of the amount needed to pay shareholders as promised and operate the business.

Dell completes deal to go private

Oct 29, 2013

US computer giant Dell announced Tuesday it had completed the deal to go private in a $24.9 billion buyout led by company founder Michael Dell.

Dell, Icahn agree on a share ownership cap (Update)

Apr 16, 2013

Dell Inc. and Carl Icahn have agreed to cap his stake in the personal computer maker while a special board committee considers competing takeover bids from the billionaire investor, a group led by CEO Michael ...

Icahn and Southeastern push against Dell buyout

Jun 06, 2013

Activist investor Carl Icahn and Southeastern Asset Management Inc. are formally urging Dell shareholders to reject a buyout offer from the struggling PC maker's founder and investment firm Silver Lake Partners.

Dell looks to calm shareholder concern over buyout

Feb 11, 2013

Dell is trying to reassure shareholders about its proposed $24.4 billion acquisition by a group led by its founder, saying it considered a number of strategic options before agreeing to the deal.

Recommended for you

Yahoo sees signs of growth in 'core' (Update)

14 hours ago

Yahoo reported a stronger-than-expected first-quarter profit Tuesday, results hailed by chief executive Marissa Mayer as showing growth in the Web giant's "core" business.

Twitter buys data analytics partner Gnip

17 hours ago

Twitter says it has bought its data partner Gnip, which provides analysis of the more than 500 million tweets its users share each day—to advertisers, academic institutions, politicians and other customers.

Zebra to spend $3.45B on Motorola business

21 hours ago

Zebra Technologies is spending more than $3 billion to buy the enterprise business of Motorola Solutions in a considerable expansion that is both technological and geographical.

User comments : 0

More news stories

Patent talk: Google sharpens contact lens vision

(Phys.org) —A report from Patent Bolt brings us one step closer to what Google may have in mind in developing smart contact lenses. According to the discussion Google is interested in the concept of contact ...

Tech giants look to skies to spread Internet

The shortest path to the Internet for some remote corners of the world may be through the skies. That is the message from US tech giants seeking to spread the online gospel to hard-to-reach regions.

Wireless industry makes anti-theft commitment

A trade group for wireless providers said Tuesday that the biggest mobile device manufacturers and carriers will soon put anti-theft tools on the gadgets to try to deter rampant smartphone theft.

ESO image: A study in scarlet

This new image from ESO's La Silla Observatory in Chile reveals a cloud of hydrogen called Gum 41. In the middle of this little-known nebula, brilliant hot young stars are giving off energetic radiation that ...

First direct observations of excitons in motion achieved

A quasiparticle called an exciton—responsible for the transfer of energy within devices such as solar cells, LEDs, and semiconductor circuits—has been understood theoretically for decades. But exciton movement within ...

Warm US West, cold East: A 4,000-year pattern

Last winter's curvy jet stream pattern brought mild temperatures to western North America and harsh cold to the East. A University of Utah-led study shows that pattern became more pronounced 4,000 years ago, ...