The Broadcom-Symantec Deal Fell Through, So What Happens Next?

Photo Credit: Reuters

Despite Broadcom walking away from the deal, many investors are actually quite happy about it.

Broadcom was initially all set to buy Symantec, but the company reported on Monday that the talks were over, and no deal would take place. The problem appears to be that Broadcom simply couldn’t accept Symantec’s offer, according to CNBC. Symantec was insisting on $28 per share for the purchase to take place, a rate which is about 26% higher than the price before the news of a potential acquisition broke. This then caused Broadcom to end negotiations, and there is currently no deal on the table.

While Broadcom showed interest in buying Symantec, Broadcom may actually walk away from the deal stronger, regardless. The company’s decision to walk away over an offer they simply could refuse is being hailed by many as a sign of strength. Broadcom’s stock rose 1.38% on Monday, pushing it to $289.31 per share. Refusing an acquisition over the price can sometimes be seen as a sign of weakness, but for a massive company like Broadcom, it’s often perceived as a sign of fiscal discipline, more than anything else. Software companies like Symantec can be quite expensive, so Symantec took  a risk and it ended alright for them, and better for Broadcom.

This one deal falling through certainly doesn’t end the possibility of Broadcom buying another company. Broadcom is still looking for other software companies to purchase, and according to The Street, Tibco, a small private enterprise software company, is widely regarded as Broadcom’s next target.

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6 months ago