Chipmaker Broadcom Inc. is in progressive talks to purchase cybersecurity firm, Symantec Corp, according to sources acquainted with the matter, as Broadcom seeks to diversify beyond semiconductors.
Shares of Symantec surged 22% in after-hours trading, whereas Broadcom fell 4%.
A deal would increase Broadcom’s push into software a year after its $18.9 billion contracts to purchase U.S. business software firm CA Inc. It additionally follows Broadcom’s failed bid to buy Qualcomm Inc.
A Symantec spokesperson stated the corporate doesn’t touch upon hypothesis. Broadcom was not instantly obtainable for remark.
Broadcom’s chief executive officer, Hock Tan, has constructed the company by a collection of formidable offers. As CEO of Avago, Tan pulled off the acquisition of Broadcom for $37 billion, bringing the two companies underneath the umbrella name of Broadcom.
A Broadcom-Symantec deal could be the second major acquisition of a cybersecurity supplier by a chipmaker, following Intel Corp’s buy of California-based mostly McAfee in 2011. Nevertheless, Intel offered a majority stake in McAfee to funding agency TPG after a failed effort to stake out a significant place within the computer safety enterprise.
Symantec was an early leader in computer security, however, is dealing with rising competitors.
The corporate, which is being investigated by U.S. regulators over an accounting irregularity, has seen a slew of significant executive departures since late last year, together with CEO Greg Clark, who abruptly stepped down in May. In August last year, Symantec stated it would cut 8% of its workforce worldwide after it slashed its revenue forecast.