Broadcom In ‘Advanced Talks’ To Acquire Symantec

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Another software move for chipmaker, as Broadcom reportedly seeks to acquire security veteran Symantec

Singapore-based Broadcom is to double down on its software foray with reports it is in “advanced talks” to acquire veteran security specialist Symantec.

Broadcom of late has become acquisitive as it seeks to expand beyond its traditional chip business. In March 2018, President Donald Trump blocked Broadcom’s attempted hostile takeover of Qualcomm, ending what would have been the largest takeover on record in the high-tech industry, valued at an estimated $140 billion (£100bn).

Months later however, Broadcom surprised many analysts and the markets with the news it was acquiring veteran enterprise software specialist CA Technologies for $18.9 billion (£16.7bn) to build “one of the world’s leading infrastructure technology companies”.

Symantec

Symantec deal?

Now Broadcom is apparently targetting Symantec. Both the FT and Bloomberg, citing people briefed about the negotiations, reported that Broadcom could pay as much as $15bn for the veteran security vendor.

According to the FT, a deal could be announced as early as Wednesday, although those briefed on the talks warned that no final agreement had been signed and the announcement could be delayed until after the US public holiday on 4 July.

Symantec itself has had a troubled time in recent years.

It was one of the pioneers of consumer antivirus software, and is perhaps best known for its Norton antivirus and BackupExec software. But it has also sought to become a serious player in the data storage arena, acquiring Veritas Software for a hefty $10.2bn (£6.3bn) in 2005.

Yet it has struggled for some time now to expand into new areas of the security market, and it has been criticised for not keeping up with key trends such as the the shift towards cloud computing and the slump in PC sales, as well as the arrival of more agile competitors.

In 2014 Symantec was reportedly in advanced talks about a possible company breakup, to split up its business into two entities, with one unit focused on its security programs, and another on data storage.

CEO troubles

Symantec also has something of a revolving door reputation for CEO departures.

In 2009, for example, Symantec appointed Enrique Salem as CEO, but he was deposed just three years later (in 2012).

Board member Steve Bennett was then appointed as CEO, but after just 20 months in the job, he was fired in March 2014 amid falling earnings.

Another CEO, Michael Brown, resigned in April 2016, and then in April 2019 CEO Greg Clark also unexpectedly stepped down and was replaced by director Richard Hill on an interim basis.

Symantec is also struggling with sales of its consumer antivirus programs and a financial investigation has ended with restated earnings.

The security vendor is also contending with an activist investor (Starboard Value LP) which won three board seats on the company last September.

But Symantec is not the only troubled entity in this party.

Broadcom’s hopes of acquiring Qualcomm were quashed by the US, and last month it was revealed that Broadcom is facing an antitrust investigation by European competition regulators, over whether it may be restricting competition via exclusivity practices.

Some may feel that Broadcom’s move into the security market, mirrors the attempt of another chip giant seeking to enter the security market, when Intel acquired McAfee for $7.7bn in 2011.

Intel had intended to hard-wire some of McAfee’s security software into its processors, but it was never able to do it and Intel ended up spinning off McAfee in 2016 in a deal worth $4.2bn.

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Author: Tom Jowitt
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