Chipmakers Avago and Broadcom have officially gone from rivals to bedfellows, as Avago announced Thursday plans acquire Broadcom for $37 billion in cash and stock.
The deal is one of the largest ever in the semiconductor industry.
According to Avago, the newly formed enterprise conglomerate, to be known as Broadcom Limited, would have annual revenue of about $15 billion.
"The combination of Avago and Broadcom creates a global diversified leader in wired and wireless communication semiconductors," Hock E. Tan, the Avago president and chief executive, said in a statement. "Avago has established a strong track record of successfully integrating companies onto its platform."
Avago is a Singapore-based company with offices in San Jose, California, and is known for producing analog, digital, mixed signal and optoelectronics components. Irvine, Calif.-based Broadcom is one of the largest semiconductor makers in the world, touting high-profile customers such as Apple, Samsung and Amazon.
With differentiated portfolios, Broadcom could fill in some holes throughout Avago's product line, particularly when it comes to voice and video applications and connected sensors. The combined companies could also benefit from greater bargaining power over customers and manufacturers, leading to a significant uptick in scale on both sides.
Broadcom co-founder Henry Samueli will become CTO of the combined company, while fellow Broadcom founder and former CEO Henry Nicholas will serve in a strategic advisory role.
The transaction is expected to close in the first quarter of next year, pending approval by shareholders and regulators. Under the terms of the deal, Avago would pay $17 billion in cash and 140 million Avago shares to acquire Broadcom.