Broadcom has guaranteed financing and recognized cost savings for the purchase of Symantec in an all-cash deal that could appreciate the cyber-security company at more than $22 billion including debt, according to individuals familiar with the matter.
The chipmaker received lending commitments from several banks also sees yearly synergy potential of roughly $1.5 billion (roughly Rs. 10,300 crores), stated the people, who asked to not be identified since negotiations are private. An agreement could be reached round mid-July, though the talks may also still drag on or fall apart, the people said.
Separately, Symantec has drawn interest from its former chief executive officer, Greg Clark, who’s teamed up with buyout firms Advent International and Permira Holdings in an effort 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 said.
Agents for Broadcom, Symantec, Clark, and Permira were unavailable for comment.
A takeover of the Mountain View, California-based company would indicate Broadcom’s second big bet in software, following its $18 billion purchase last year of CA Technologies. That trade spurred some investors to express concern that CEO Hock Tan’s acquisition strategy has been stretched too far after playing a key role in consolidating from the 470 billion processor 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 shares have gained 13 percent since July 3 after Bloomberg News first reported the takeover talks, providing the company a market value of about $15.5 billion. Broadcom has fallen about 4.3percent in that period of time, valuing it at about $113 billion.
Symantec plunged on May 10 following a soft prediction and the primary executive’s unexpected death stoked investor concerns.