On Thursday, renowned chipmaker Broadcom officially announced about it acquiring Symantec’s enterprise security unit for the sum of $10.7bn. The deal between the two companies splits Symantec into two portions effectively, with Broadcom having complete ownership over Symantec’s enterprise security business as well as its brand name.
Symantec would continue to hold ownership of its customer-facing product unit, which includes Norton anti-virus software as well as LifeLock identity-theft protection brand.
Broadcom stock price increased 1 percent in after-hours trading, following the deal announcement. On the other hand, Symantec stocks were halted just after the market closure, but they increased around 5 percent when they recommenced trading post hours.
Broadcom said that it expects to earn over $1bn in terms of run-rate cost synergies in a year after the deal closes during its first 2020 fiscal quarter. The chipmaker said that it shall own as well as utilize the brand name Broadcom after the closure of the deal.
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In a statement, Symantec said it expects the deal to close before this year’s end. After the closure of the deal, the cyber-security specialist plans on returning the deal proceeds in the form of $12/share special dividend. Symantec also plans on increasing its dividend to 12.5 cents/share post the deal closure.
Notably, speculations related to a Broadcom-Symantec deal surfaced during early July, thus moving Symantec share price upward. Just weeks later, David Faber of CNBC Group reported that deal talks between the companies had ended, which resulted in Symantec shares moving downwards.
Broadcom has continually been on acquisition quest for years. It previously tried to acquire Qualcomm for over $1bn but ultimately failed as President of the US Donald Trump interfered and stopped the deal. After that, Broadcom cracked a deal worth nearly $19bn with software firm CA, which has helped it tremendously to expand its business.