Avago Technologies is planning to buy chip maker Broadcom in a $37 billion deal. The buyout will see Avago Technologies emerge as the world?s third leading chip maker by revenue. The combined entity is expected to have annual revenue of $15 billion. At present, globally, Intel, Qualcomm and Texas Instruments are the top three leading chip maker by revenue.
Avago Technologies based out of both Singapore and San Jose, California, is expected to save $750 million in costs on an annual run rate basis18 months after the closure of the deal. The company posted revenue of $4.27 billion in the financial year ended November 2014. Meanwhile, Broadcom reported revenue worth $8.43 billion in November 2014.
Avago Technologies is looking at the acquisition to gain scale and improve efficiencies, while tapping new growth areas such as the internet of things and connected cars.
