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Broadcom's Hock Tan seems to be scratching his M&A itch again, with the wireless chipmaker reported to be in talks to acquire the security software company Symantec in a deal that could be worth $15bn.
It's been one audacious US tech deal after another for the chief executive, whose Avago Technologies hunted down the semiconductor businesses of AT&T’s Bell Labs, Hewlett-Packard and then Broadcom, before being forced to withdraw a $142bn offer for Qualcomm last year, when President Trump blocked the Singapore company's bid on national security grounds.
Since then, he has turned his attention to business software. The synergies were not apparent when Broadcom picked up CA Technologies for $19bn last year, but the infrastructure software provider has been performing well. He would be buying Symantec on the cheap compared to its valuation two years ago, but we don't yet know Mr Tan's reasoning for the latest addition.
It would echo Intel buying McAfee in 2010 for nearly $8bn when chief executive Paul Otellini predicted embedding security at the chip level would become a key selling point. That didn't work out and Intel ended up getting rid of the business six years later.
It's more likely Mr Tan sees Symantec as another piece in his jigsaw for consolidating the enterprise software market, a sector that can offer good cash flow from regular renewals, along with higher margins and growth to offset the lower returns from a largely commoditised chip industry.
The Internet of (Five) Things
1. More Libra warnings from regulators and politicians
US lawmakers have called on Facebook to pause its plans to launch a digital currency “immediately”, until regulators and Congress have examined the risks the project poses to “privacy, trading, national security, and monetary policy”. In the UK, a Financial Conduct Authority regulator has warned Facebook and other issuers of digital currencies against the tech giant’s traditional motto of “move fast and break things”, putting them on notice that providers of financial services must “get it right the first time round”.
2. Tesla's delivery milestone
Tesla said it delivered 95,200 cars in the second quarter, a record turnround from 63,000 in the first quarter when it was struggling with the first international deliveries of its Model 3. Shares in the electric carmaker traded 6 per cent higher on Wednesday on the news.
3. Spotify's indie initiative is a miss with investors
Last summer, Spotify unveiled a tool to allow artists to release their music without a record label or distributor, enabling indie musicians to cut out the middleman. But less than a year later, the idea has been abruptly abandoned. Anna Nicolaou's analysis reveals it antagonised major labels, produced few stars and did not help impress investors.
4. Cambridge dons new tech clothes
The English university town of Cambridge also has 4,700 knowledge-intensive companies based there, employing 61,000 people with turnover close to $15bn. The tax generated by them is equal to nearly half the government budget for science, engineering and technology for all of the UK. Our UK affairs correspondent William Wallis has visited Cambridge to seek out the latest tech powering “Silicon Fen"'s continuing growth.
5. Huawei's founder is wounded but defiant
Today's Big Read visits the Shenzhen headquarters of Huawei and has an extended interview with Ren Zhengfei, the company’s founder and chief executive. He shows a black-and-white photo of a second world war Soviet plane that has been so badly damaged by enemy fire that it has gaping holes in its wings and body. “I felt that it was quite like us. We are riddled with bullets from the US,” he says.
Tech tools — corporate travel apps
TripActions says it can cut the time spent booking the average business trip from an hour to six minutes. It is one of a number of start-ups trying to change the way that companies book their travel and take a slice of spending that was estimated at $1.3tn in 2017. Alice Hancock looks at what's on offer from TripActions, TravelPerk, Homelike, Rocketrip and others.
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