Broadcom’s Unconventional Symantec Acquisition

Photo Credit: Reuters

Broadcom is one of the largest chip companies in the world, and their acquisition of struggling cyber security company Symantec is almost complete.

According to sources who’ve been briefed on the move, the deal could be delayed until after the Independence Day holiday.

While the move may have come as a surprise, Symantec’s shares didn’t seem to mind. Symantec shares shot up by over 20% on the news of advanced talks between them and Broadcom. There’s a good, simple reason for this in Symantec’s recent troubles. While they are the world’s largest producer of cyber security software, Symantec has faced years of managerial difficulties and shifting trends in the cyber security industry. Cloud security companies have recently taken center stage in the cyber security industry, and new companies focusing on protecting mobile devices have been emerging in recent years. The heightened competition has left Symantec in a precarious position as the company has slowed down and fallen short of revenue estimates. Enter Broadcom.

Broadcom has been on a buying spree recently. The chipmaker bought CA Technologies for $19 billion last year. They then went on to try and purchase Qualcomm, but the move was blocked by the Trump administration. While a chipmaker buying a struggling cyber security firm is unconventional, it’s not the first move of its kind. Intel purchased McAfee back in 2011 for $7.7 billion in order to leverage McAfee’s software capabilities into their industry-leading CPUs. The move didn’t work out as planned, but the tech industries are perpetually interconnected and there are probably quite a few plans for Symantec that Broadcom has already prepared. In the end, Symantec has little to lose, and much to gain from this deal, as the stock markets have already demonstrated.

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5 years ago