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Broadcom deal to buy CA makes little sense on the surface

Market Watch
Broadcom deal to buy CA makes little sense on the surface

Broadcom Inc.’s surprise $18.9 billion deal to buy software company CA Inc. makes little sense on the surface, but signals a new direction for the tech conglomerate, possibly turning itself into a private-equity player. Late Wednesday, Broadcom AVGO, -2.84% confirmed it would buy CA CA, +0.16% , which derives just over 50% of its revenue from mainframe software, for $18.9 billion in cash, or $44.50 a share. The news was first reported by the Wall Street Journal, and shares of Broadcom tumbled 6% in after-hours trading. CA, however, jumped 16% to $43.29 after hours.. The move is a new direction into software for Hock Tan, Broadcom’s chief executive, whose hostile effort to buy Qualcomm Inc. QCOM,