Broadcom, a major player in the chip industry, is close to finalizing its acquisition of struggling cybersecurity firm Symantec.
Sources familiar with the situation suggest that the deal might face a slight delay until after the Independence Day holiday.
Though unexpected, the news of Broadcom’s interest in Symantec had a positive impact on the latter’s stock. Symantec’s shares surged by more than 20% following reports of the advanced discussions. This spike can be attributed to Symantec’s recent challenges. Despite being a key player in the cybersecurity software market, Symantec has grappled with internal management issues and evolving industry dynamics. The rise of cloud security providers and the emergence of firms specializing in mobile device protection have heightened competition, leaving Symantec struggling to meet revenue targets. This is where Broadcom comes in.
Broadcom has been actively acquiring companies in recent times. After acquiring CA Technologies for $19 billion last year, Broadcom attempted to purchase Qualcomm, but the move was thwarted by the Trump administration. While the acquisition of a troubled cybersecurity company by a chipmaker is unconventional, it’s not unprecedented. In 2011, Intel bought McAfee for $7.7 billion to integrate McAfee’s software expertise into Intel’s leading CPUs. Although the outcome was not as expected, the tech industry is intricately connected, and Broadcom likely has strategic plans in place for Symantec. Symantec stands to benefit significantly from this deal, as evidenced by the stock market’s reaction.
