Broadcom buys ServerWorks

Strategic

By Linda Harrison in New York • Get more from this author

Posted in Business, 8th January 2001 19:47 GMT

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Chip giant Broadcom is to buy server chipset maker ServerWorks in a $975 million deal.

Broadcom said today it would issue 11 million shares in exchange for all outstanding stock in the fellow Californian outfit. The acquisition is the latest in a stack by Broadcom, which specialising in making semiconductors for cable modems, and is aimed at pushing it further into the high-speed communications arena.

The purchase, expected to close within 60 days, will add between two to three cents a share to Broadcom's earning's per share in each quarter of this year, the company said.

ServerWorks CEO Raju Vegesna will be VP and general manager of Broadcom's ServerWorks Business Unit - which will be a wholly-owned Broadcom subsidiary.

"This acquisition is very strategic to our mission of delivering end-to-end broadband solutions for higher-speed Internet and e-business connectivity," said Dr Henry Nicholas III, Broadcom president and CEO.

Last year Broadcom shelled out for around a dozen companies, including Israeli chipmaker VisionTech and UK firm Element 14.

It also recently patched up its differences with rival Intel - the two had been embroiled in a series of claims and counter claims in 2000 over the alleged poaching of trade secret and patent infringement. ®