Turbotodd

Ruminations on tech, the digital media, and some golf thrown in for good measure.

Archive for the ‘acquisitions’ Category

Broadcom to Acquire CA

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Today is apparently a big deal day. Pun intended.

But before I launch into that, let me just send out my congrats to both France and Croatia, both of whom won their respective matches against Belgium and the UK this week to go on to the World Cup Finals on Sunday in Moscow.

There’s been a lot of talk about American viewership being down for the World Cup due to the American men’s team not making the tournament.

Tell that to all the Austin bars and restaurants I saw jam packed with fans watching a whole slew of games (and clearly not all of them were expats). There’s plenty of American soccer fans who grew up playing and loving the sport, and for whom the World Cup is a soccer Superbowl on steroids.  I’m one of them, and I’ll be glued to the TV on Sunday to see if David can beat Goliath.

Now back to the deals…Broadcom has announced it will acquire IT management software company CA Technologies for $18.9 billion in cash, according to a report from CNBC.

From the statement issued by Broadcom:

Broadcom Inc. (NASDAQ: AVGO), a leading semiconductor device supplier to the wired, wireless, enterprise storage, and industrial end markets, and CA Technologies (NASDAQ: CA), one of the world’s leading providers of information technology (IT) management software and solutions, today announced that the companies have entered into a definitive agreement under which Broadcom has agreed to acquire CA to build one of the world’s leading infrastructure technology companies.

Hock Tan, President and Chief Executive Officer of Broadcom, said, ‘This transaction represents an important building block as we create one of the world’s leading infrastructure technology companies. With its sizeable installed base of customers, CA is uniquely positioned across the growing and fragmented infrastructure software market, and its mainframe and enterprise software franchises will add to our portfolio of mission critical technology businesses. We intend to continue to strengthen these franchises to meet the growing demand for infrastructure software solutions.’

But ZDNet’s Larry Dignan writes that “few investors and analysts are buying it,” suggesting it has overtones of Intel’s own failed software adventures (Wind River, McAfee…)

Macquarie Capital analyst Srini Pajjuri is quoted in the ZDNet story saying that:

History suggests that combining Semi and unrelated Software businesses is risky (Intel + McAfee). Cisco has had success transitioning from a hardware-only model to a recurring revenue model, but in Cisco’s case, software is typically bundled with its hardware solutions, which is different from the Broadcom + CA model.

Written by turbotodd

July 12, 2018 at 10:52 am

Posted in 2018, acquisitions

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Broadcom Sweetens Qualcomm Offer

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Reuters is reporting that Broadcom Ltd. sweetened its bid to buy Qualcomm Inc. for more than $121 billion, its “best and final offer.”

If the deal were to go through, it would be the largest in tech history, writes Reuters.

Qualcomm indicated it would review the revised proposal and will have no further comment on it until the board completes its review. In November, Qualcomm had rejected the original $103 billion bid as  undervaluing the company.

Singapore-based Broadcom is known for its connectivity chips used in products ranging from mobile phones to servers and Qualcomm provides chips to mobile carrier networks to deliver broadband and data – a business that will benefit significantly due to the roll out of 5G wireless technology.

Written by turbotodd

February 5, 2018 at 9:56 am

Chinese Expansion

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While everybody freaks out about the Meltdown and Spectre microprocessor exposures, life goes on in much of the tech world.

Well, sort of.

TechCrunch reported yesterday that the U.S. Government has blocked the proposed acquisition of global payment service MoneyGram by Alibaba’s Ant Financial.

This is the second China-led acquisition of a U.S. tech company that has “failed” during U.S. President Trump’s tenure. The first was last September when a private equity group was blocked from purchasing Lattice Semiconductor due to “potential security risks.”

Here’s the background from TechCrunch:

Ant Financial, the Alibaba affiliate which controls Alipay — China’s top mobile wallet — and other financial services, announced a deal to buy Nasdaq-listed MoneyGram in April 2017 after it beat off a rival bid from Euronet. Ant initially bid for MoneyGram in January 2017 as a means to develop its cross-border payment network into the U.S., and major corridors including India and the Philippines, but instead it will “explore and develop initiatives” to collaborate with MoneyGram’s business.
– via TechCrunch

The article goes on to suggest that “the collapse of the deal is a huge blow to Ant, which spent much of 2017 developing its mobile payment network beyond China and into Southeast Asia, India, Korea, Japan and other parts of Asia with a series of partnerships and investments.”

As Confucius said, “Everything has beauty, but not everyone sees it.” That includes Uncle Sam.

On the other hand, nothing’s stopping the Chinese in Brazil!

SiliconANGLE reported that the Chinese ride-hailing firm, Didi Chuxing, bought Brazilian car booking service 99 Corp. yesterday for some $600M.

99 is Brazil’s version of Uber, writes SiliconANGLE, and has some 300,000 drivers and 14 million users in 400 cities across Brazil.

The deal is notable not only as a major acquisition in a large marketplace but also because it marks the beginning of Didi Chuxing’s international expansion. The Chinese giant was first reported to be expanding into Mexico in December with a ground-up strategy as opposed to an acquisition. Its global ambitions were finally laid bare when it said Dec. 21 that its latest round would in part be dedicated to its international expansion. The other takeaway from the deal is that Didi Chuxing is willing to acquire companies it has previously invested in, meaning there’s a swath of companies on Didi’s radar. To date, Didi is a large investor in Southeast Asia’s GrabTaxi Holdings Pte. Ltd. and India’s Ola (ANI Technologies Pvt. Ltd.), with smaller investments in Eastern Europe-focused Taxify OU, the Middle East’s Careem and last but certainly not least Lyft Inc., Uber’s largest rival in the United States.
– via SiliconANGLE

Et tu, Uber?

Written by turbotodd

January 4, 2018 at 12:04 pm

Posted in 2018, acquisitions, china, uber

CVS to Buy Aetna in $69 Billion Deal

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CVS Health said on Sunday that it had agreed to buy Aetna for about $69 billion, in a deal that would combine the drugstore with one of the biggest health insurers in the United States, according to a report from The New York Times.

The merger comes at a time of turbulent transformation in health care. Insurers, hospitals and pharmacy companies are bracing for a possible disruption in government programs like Medicare as a result of the Republicans’ plan to cut taxes. Congress remains at an impasse over the future of the Affordable Care Act, while employers and consumers are struggling under the weight of rising medical costs, including the soaring price of prescription drugs. And rapid changes in technology have raised the specter of new competitors — most notably Amazon. A combined CVS-Aetna could position itself as a formidable figure in this changing landscape. Together, the companies touch most of the basic health services that people regularly use, providing an opportunity to benefit consumers. CVS operates a chain of pharmacies and retail clinics that could be used by Aetna to provide care directly to patients, while the merged company could be better able to offer employers one-stop shopping for health insurance for their workers.
– via www.nytimes.com

 

But as the Times goes on to observe, critics worry customers could find their healthcare choices sharply limited (i.e., less choice of where to fill a prescription or get care if so many roads lead through a combined CVS/Aetna.

But in the announcement, the companies pointed out clear synergies that would benefit patients:

the two companies emphasized their ability to transform CVS’s 10,000 pharmacy and clinic locations into community-based sites of care that would be far less expensive for patients. “We think of it as creating a new front door to health care in America,” CVS Health’s chief executive, Larry J. Merlo, said in an interview. The merger would establish a new way of delivering care, with nurses, pharmacists and others available to counsel people about their diabetes or do the lab work necessary to diagnose a condition, Mr. Merlo said. “We know we can make health care more affordable and less expensive.”
– via www.nytimes.com

Looming in the background, the Times observes, a lingering Amazon and Jeff Bezos, rumored to be preparing for an entry into the pharmacy business.

As to antitrust considerations, both companies played down the prospect of regulation, arguing that the takeover is a “vertical merger” combining companies in two different industries.

Written by turbotodd

December 4, 2017 at 9:21 am

Let the Chips Fall…

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Some big deals brewing early on a Monday morning.

Reuters reported that chipmaker Marvell Technology Group Ltd. would buy smaller rival Cavium Inc. in a $6 billion deal “as it seeks to expand its wireless connectivity business in a fast consolidating semiconductor industry.”

Hamilton, Bermuda-based Marvell makes chips for storage devices while San Jose, California-based Cavium builds network equipment.
– via U.S.

 

China’s e-commerce giant, Alibaba, will buy a big stake in China Wal-Mart rival, Sun Art Retail Group Ltd, for $2.88 billion, which would give it a 36 percent stake in the company.

Alibaba, which runs the world’s largest online shopping operation, sees traditional retail venues as a way to expand its reach into fresh foods while also creating new demand for its Alipay mobile-payment business and its logistics services. “Physical stores serve an indispensable role during the consumer journey, and should be enhanced through data-driven technology and personalized services in the digital economy,” Alibaba chief executive officer Daniel Zhang said in a statement.
– via WSJ

This follows on the heels of Amazon’s $13.7 billion purchase of U.S. grocer Whole Foods.

But China’s not done. One of its leading phone and appliances makers, Xiaomi Corp., has also indicated it would invest as much as $1 billion in 100 startups in India over the next five years. The move is apparently an effort to build an ecosystem of apps around its smartphone brand.

And if you’re still waiting for your Uber, you may not have to wait much longer. Just don’t look for the driver.

Reuters is reporting that Uber plans to buy up to 24,000 self-driving cars from Volvo, building on a three-year relationship between the two companies.

Geely-owned Volvo said in a statement on Monday it would provide Uber with its flagship XC90 SUVs equipped with autonomous technology as part of a non-exclusive deal from 2019 to 2021. A Volvo spokesman said it covered up to 24,000 cars. The self-driving system that would be used in the Volvo cars — which have yet to be built — is under development by Uber’s Advanced Technologies Group.
– via U.S.

That would be the single largest purchase for Volvo, and the broader autonomous vehicle industry, and would give Uber its first commercial fleet of cars.

No financial details were disclosed for the purchase, which would be a massive new investment for Uber and mark a change from Uber’s long-standing business model where contractor drivers buy or lease and maintain their own cars.
– via U.S.

Written by turbotodd

November 20, 2017 at 9:39 am

A Deal to Boost Mobile App Speeds

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ZDNet is reporting that web performance and security provider Cloudflare has acquired Neumob, a mobile accelerator for apps.

They report that Neumob will allow the company to provide improved end-to-end optimization across desktop and mobile, with no disruptions or speed loss based on the device used.

VentureBeat wrote of the deal:

Neumob’s technology is designed to replace traditional internet protocols that weren’t necessarily designed with the issues of wireless networks in mind, Cloudflare CEO Matthew Prince told VentureBeat. He said that TCP, one of the core protocols behind the internet, assumes that packet loss means there’s a router in a wired network being overwhelmed somewhere and backs off of transmitting data. “[That] makes a ton of sense on a wired network, but on a mobile network, when you start to see packet loss, that could just mean someone turned on the microwave or you’re driving through a tunnel, there are solar flares, or any number of things that the right reaction isn’t to back off,” Prince said. Neumob built a new set of capabilities that are designed to do away with issues like that. The technology is able to make applications load up to 3 times faster and reduce app errors and timeouts by up to 90 percent.
– via VentureBeat

Written by turbotodd

November 14, 2017 at 9:12 am

Qualcomm Board Rejects Broadcom’s Takeover Bid

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Happy Monday.

The Board of Directors for Qualcomm Inc. has rejected Broadcom’s $105 billion takeover bid.

“It is the Board’s unanimous belief that Broadcom’s proposal significantly undervalues Qualcomm relative to the Company’s leadership position in mobile technology and our future growth prospects,” said Paul Jacobs, Executive Chairman and Chairman of the Board of Qualcomm Incorporated.
– via Qualcomm

“No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry.  We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G,” said Steve Mollenkopf, Chief Executive Officer of Qualcomm Incorporated.
– via Qualcomm

Qualcomm stock was up nearly 1 percent in early morning trading.

If you’re interested in all things cyber spooks and shadows, The New York Times feature on the NSA’s Tailored Access Operations’ recent fate is a must (but quite long) read.

And if you’re looking for quantum leaps in computing power, IBM announced late Friday two significant quantum processor upgrades for its IBM Q early-access commercial systems.

The first IBM Q systems available online to clients will have a 20 qubit processor, featuring improvements in superconducting qubit design, connectivity and packaging.

And the company has also successfully built and measured an operational prototype 50 qubit processor with similar performance metrics.

Clients will have online access to the computing power of the first IBM Q systems by the end of 2017.

In case you were wondering, a qubit, or “quantum bit,” is a unit of quantum information — the quantum analogue of the classical bit. But a qubit is distinguished by its being a two-state quantum-mechanical system, which allows a single photon both vertical and horizontal polarization.
You can read more in this blog post, “The future is quantum.”

Written by turbotodd

November 13, 2017 at 9:01 am

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