Weeks after Symantec walked away after price disagreement, reports suggest the two are close to a deal
Broadcom’s efforts to double down on its software foray are reportedly back on, after it was reported that its “advanced talks” to acquire veteran security specialist Symantec are back on.
According to the Wall Street Journal, chipmaker Broadcom is nearing a deal to acquire the enterprise business of Symantec.
It comes after Broadcom’s attempt to acquire Symantec entirely collapsed in mid July, after the two firms were reportedly unable to reach agreement on the acquisition price for the whole of Symantec.
The firms had reportedly been in “advanced talks” about the acquisition weeks prior to that, and the deal had expected to be announced in late July.
Now the WSJ has reported that Broadcom’s acquisition of the enterprise segment of Symantec could be announced as soon as this week, when Symantec reports its results, according to people familiar with the matter.
It is reported that the deal could value the Symantec division at around $10 billion, one of the people told the WSJ.
There is no word on what will happen to Symantec’s consumer facing business going forward.
Shares of Symantec rose after the market closed on Wednesday, rising 13 percent to $23.15 after the WSJ report. Shares in Symantec had fallen sharply last month when the two companies failed to reach an agreement.
The acquisition (if it goes ahead) would be the second major software purchase for Broadcom, after it surprised many analysts and the markets in July 2018 when it acquired veteran enterprise software specialist CA Technologies for $18.9 billion (£16.7bn) to build “one of the world’s leading infrastructure technology companies”.
Broadcom has become acquisitive of late as it seeks to expand beyond its traditional chip business.
But 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).
President Trump blocked the deal on national security grounds.
Symantec meanwhile has had a troubled past 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 security 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.
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.
There is still no permanent CEO appointed, and its chief financial officer, chief operations officer and chief marketing officer have also recently departed.
The security vendor is also contending with an activist investor (Starboard Value LP) which won three board seats on the company last September.
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