Broadcom Tanks on Report It Will Buy CA Technologies

What does COBOL have to do with wireless semiconductors?

ON-CP327_Broadc_D_20180711163729.jpg Broadcom Ltd.

It's not clear, but it's a relevant question this afternoon as The Wall Street Journal's Dana Cimilluca and Dana Mattioli report that Broadcom  (AVGO), the wireless chip giant that competes with Qualcomm (QCOM), has agreed to pay $18 billion, or $44.50 per share, to buy CA Technologies (CA), also known as  "CA," formerly Computer Associates, citing multiple unnamed sources.

A deal announcement could come later today, the authors write.

The deal price would be a 20% premium to CA's $37.21 close on Wednesday. Ergo, CA shares are up $5.98, or 16%, at $43.19.

Aside from CA being based in New York City, and Broadcom being based in San Jose, Calif., this may not be the deal that investors had in mind when the company's CFO said back in March that Broadcom saw lots of M&A prospects, in the wake of its failed effort to buy Qualcomm.

Although CA is a diversified software provider, its legacy lies in tools for mainframe  software development, such as for the COBOL programming language, and IBM's (IBM) " CICS."

Broadcom stock is down $11.86, or 5%, at $231.58, in late trading.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Technology , Stocks
Referenced Symbols: AVGO , QCOM , IBM

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