Business

Broadcom Nears trades to buy Symantec's business




Broadcom
Inc.


AVGO 1.35%

approaching purchase agreement

Symantec
Corp.


SYMC -0.24%

business after the attempted purchase of the entire cybersecurity firm fell apart.

An agreement for the Symantec business could be announced as early as Thursday, when Symantec reports the results, according to people familiar with the case. As with the previous trial, the conversations may still fall apart or the time frame could be extended.

The deal could value the Symantec division at around $ 1[ads1]0 billion, one of the people said.

Broadcom had previously been late-stage discussions to buy the entire Symantec before the talks collapsed last month. Since then, the two sides have started discussions again, and Broadcom has zeroed in on Symantec-serving businesses, accounting for about half of $ 5 billion in annual revenue. The consumer segment stands for the rest.

The deal would be great for Symantec. The total market value is about $ 12.6 billion – it has more than $ 2 billion of net debt – compared to around $ 107.6 billion for Broadcom. Symantec is entitled to report its first quarter earnings on Thursday afternoon.

Shares of Symantec were spiked after the market closed Wednesday, rising 13% to $ 23.15 after the Wall Street Journal reported the latest deal negotiations. They had fallen sharply last month when the two companies failed to reach an agreement on terms of sale of an entire company.

The 37-year-old Symantec became a household name selling consumer antivirus software. The company also sells cybersecurity products, but has recently struggled to expand its business area.

Symantec has had a number of difficulties in recent years, including accounting problems that led to reworked economies and management discrepancies. In May, former chief executive Greg Clark abruptly resigned, and the chief financial officer, chief executive and marketing director also recently resigned. A year ago, it drew the attention of activist investor Starboard Value LP, which struck a settlement for board representation.

Broadcom, a semiconductor power plant largely built through acquisitions, has been on the hunt for several deals since President Trump blocked his quest for rival

Qualcomm
Inc.

in 2018, citing security risk. Broadcom has since relocated its headquarters from Singapore to the United States.

Broadcom Chief Executive Hock Tan has been focused on diversifying beyond the company's core business and pushing into the lucrative software arena. Last year, he made $ 19 billion to buy software company CA Technologies, formerly Computer Associates.

CA is expected to make around $ 3.5 billion a year in revenue, and Symantec's business unit raised more than $ 2.5 billion in the last fiscal year ended in March.

Agreements between chip manufacturers and cybersecurity companies have not always produced the desired results.

Intel
Corp

bought McAfee in 2010 for $ 7.68 billion, in the chip giant's largest acquisition ever. McAfee's security products never combined with Intel's hardware to generate revenue Intel had hoped for. The business was spun off to an independent entity in 2017, and the magazine reported last month that they were preparing for an initial public offering.

Technology has been the busiest sector of mergers and acquisitions around the world this year, as the company's jockey for position in a rapidly changing industry landscape. There have been $ 455.9 billion technical deals so far this year, up from $ 397.2 billion in the same period of 2018, according to Dealogic.

Write to Robert McMillan at Robert.Mcmillan@wsj.com and Cara Lombardo at cara.lombardo@wsj.com

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