Chip maker Broadcom said on Wednesday that it will acquire software vendor CA Technologies in an all-cash deal that's valued at $18.9 billion, confirming earlier reports that the acquisition announcement was imminent.
San Jose, Calif.-based Broadcom will pay $44.50 per share for CA Technologies as part of the deal, which has been approved by the boards of directors of both companies. The agreement represents a premium of approximately 20 percent to the closing price of CA common stock on July 11, the companies said in a release. The acquisition -- which still needs the approval of CA shareholders and regulators in the U.S., EU and Japan -- is expected to close by the end of this year.
Hock Tan, the president and CEO of Broadcom, said that the combination of CA and Broadcom would create "one of the world's leading infrastructure technology companies."
Broadcom said it intends to fund the deal with cash on hand and $18 billion in new debt financing.
New York-based CA Technologies stock soared nearly 16 percent in after-hours trading to $43.10 per share following the Broadcom acquisition news. Shares of Broadcom fell about 5 percent to $229.98 per share during after-hours trading. Broadcom has a market cap of $108 billion, while CA Technologies has a market value of $15.6 billion.
The CA deal comes just four months after Broadcom's bid to buy Qualcomm for a whopping $121 billion was shut down by President Donald Trump who citing national security concerns. President Trump said there is "credible evidence" that Broadcom's proposed move to exercise control of Qualcomm "might take action that threatens to impair the national security of the United States."
In November, Broadcom completed its acquisition of Brocade Communications for $5.9 billion to boost Broadcom's position in enterprise storage and networking.
Mark Haranas contributed to this report.