Broadcom Is Said to Progress in $22 Billion Symantec Pursuit

(Bloomberg) -- Broadcom Inc. has secured financing and identified cost savings for the acquisition of Symantec Corp. in an all-cash deal that could value the cybersecurity firm at more than $22 billion including debt, according to people familiar with the matter.

The chipmaker received lending commitments from several banks and sees annual synergy potential of about $1.5 billion, said the people, who asked not to be identified because negotiations are private. An agreement could be reached around mid-July, though the talks could also still drag on or fall apart, the people said.

The news sent shares of Symantec up as much as 7.4% in trading before markets opened in New York.

Separately, Symantec has drawn interest from its former chief executive officer, Greg Clark, who has teamed up with buyout firms Advent International and Permira Holdings in an attempt to muster a competing offer, said the people. The group so far has been unable to compete on price with Broadcom, making the pursuit a long shot, they said.

Representatives for Broadcom, Symantec, Clark, and Permira were unavailable for comment. A representative for Advent declined to comment.

Overstretched

A takeover of the Mountain View, California-based company would mark Broadcom’s second big bet in software, following its $18 billion purchase last year of CA Technologies. That transaction spurred some investors to express concern that CEO Hock Tan’s acquisition strategy was being stretched too far after playing a key role in consolidating in the $470 billion chip industry.

That deal also came after San Jose, California-based Broadcom abandoned a hostile pursuit of rival chipmaker Qualcomm Inc., when U.S. President Donald Trump blocked the transaction citing national security risks.

Symantec’s shares have gained 13% since July 3 after Bloomberg News first reported the takeover talks, giving the company a market value of about $15.5 billion. Broadcom has fallen about 4.3% in that period, valuing it at about $113 billion.

Symantec plunged on May 10 after a soft forecast and the chief executive’s abrupt departure stoked investor concerns.

--With assistance from Kiel Porter.

To contact the reporters on this story: Liana Baker in New York at lbaker75@bloomberg.net;Ed Hammond in New York at ehammond12@bloomberg.net;Ian King in San Francisco at ianking@bloomberg.net

To contact the editors responsible for this story: Aaron Kirchfeld at akirchfeld@bloomberg.net, ;Matthew G. Miller at mmiller144@bloomberg.net, Liana Baker

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