According to media quotes of people familiar with the matter, (Broadcom Inc.), one of the largest chipmakers in the world, It is in talks to acquire SAS Institute Inc., a private data analysis software company. This is the latest move by the acquisitive technology giant to strengthen the layout of the enterprise software market.
A deal, which values SAS at $15 billion-$20 billion, could be struck in the coming weeks, according to people familiar with the matter. However, the final decision has not yet been made and the negotiations are likely to break down.
Headquartered in North Carolina, SAS provides data and analytical solutions to customers in a variety of industries, including banking, healthcare, retail and manufacturing.
Founded in 1991, Broadcom is one of the world's largest semiconductor companies and the world's largest manufacturer of WLAN chips. The company's wireless connection chips are used in Apple's iPhone and other smartphones. Its switch chips and custom designs are an important part of data centers owned by cloud computing giants such as Alphabet Inc's Google and Amazon's AWS. Broadcom is also a major supplier of chips for set-top boxes and home networking equipment.
Broadcom's main business is semiconductor production, but it has been actively diversifying. The acquisition of SAS, Broadcom will further expand the software sector.
Through a series of deals, CEO Hock Tan has made Broadcom one of the world's largest semiconductor manufacturers by market capitalization.
He has continued to work in software in recent years, first buying software company CA Technologies, for $19 billion in 2018 and then Symantec's enterprise security business for $10.7 billion in 2019.
In the most recent quarter, Broadcom generated 27% of its revenue from its software business. These acquisitions, which were initially unfavored by investors, reduced the company's dependence on sales in the semiconductor market.
Broadcom shares rose nearly 1.2% on Monday to close at $485.75. The stock is up 11% this year, lagging behind the 19% rise in the Philadelphia stock exchange semiconductor index.
