Avago-Broadcom Deal: What's in It for You?
Junko Yoshida, Chief International Correspondent
5/28/2015 01:54 PM EDT
Where is the affinity - or any apparent good vibe - connecting Avago to Broadcom?
One of the fascinating features of capitalism is that money talks.
For example, I can’t help but see Avago’s eye-popping $37 billion acquisition of Broadcom as an outspoken case of Wall Street winning huge over the engineering community.
The deal was done on behalf of the two companies’ shareholders. Nothing wrong with that. It’s textbook (well, Milton Friedman’s textbook) capitalism.
But here’s the rub. I can’t see any imperative reason that Broadcom had to be gobbled up by a smaller company. Avago had about $4.3 billion in revenues in the last fiscal year, while Broadcom made almost double that amount. Picture a salmon swallowing a shark.
It isn’t like Broadcom was in dire straits, fighting for survival. Far from it.
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