Tuesday, 16 July 2019 08:50

Symantec insistence on US$28 price scuttles Broadcom deal: report Featured

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Symantec insistence on US$28 price scuttles Broadcom deal: report Image by sunil kargwal from Pixabay

An anticipated deal for processor maker Broadcom to buy security firm Symantec has fallen through due to the insistence of the latter on a price of US$28 per share, which was not acceptable to the former.

The website CNBC reported that Broadcom had initially said it was willing to pay US$28.25 per share but had reduced that figure after due diligence.

The acquisition was reported to be close to finalisation on 4 July.

Had the deal eventuated, it would have been the second in which a processor company purchased a security firm.

Intel bought McAfee in 2011 but failed to gain a foothold in the security arena. It then sold a majority stake to the investment firm TPG.

Broadcom bought business software company CA a year ago, at a cost of US$18.9 billion.

Last year, Broadcom attempted to buy Qualcomm but the deal was scuttled by US President Donald Trump.

The then Singapore-based Broadcom was told it could not complete what would have been the biggest technology deal ever because of national security concerns.

Trump said he had made his decision based on a CFIUS review which had examined how Broadcom’s purchase of Qualcomm might affect 5G networks.

CNBC said Broadcom had, for some time, been trying to buy an infrastructure company and had looked at Tibco. Vista Equity Partners picked up Tibco in 2014 at a cost of US$4.3 billion.

Symantec is under investigation by the US Securities and Exchange Commission over accounting irregularities. The company also faces a lawsuit from shareholder James Felix, who claims its top executives massaged financial figures.

The company lost its president and chief executive Greg Clark in May, when he became the fifth top executive to quit in five months.

Clark's exit came after Symantec, one of the bigger security firms in the US, reported poor sales for the fourth quarter of fiscal 2019, though profits were bolstered by expenses being cut.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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