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Microchip giant Broadcom buys US IT group despite recent 'national security' block

Margi Murphy
Broadcom said it will buy CA Technologies for $18.9bn - REUTERS

The chipmaking giant Broadcom, which was recently blocked from a mega-merger with competitor Qualcomm by Donald Trump over national security concerns, is buying software giant CA Technologies in a fresh bid to enter the US market.

The microchip giant will pay $18.9bn (£14.3bn) for the software and services company in a move it claims will “diversify” its products.

Broadcom chief executive Hock Tan said: "This transaction represents an important building block as we create one of the world's leading infrastructure technology companies”.

Tan was left smarting after Trump quashed his $117 billion takeover of American chipmaker Qualcomm, after trade chiefs suggested that the merger could give China a distinct advantage in the market. If it had gone ahead it would have been the largest technology merger in history.

Broadcom will pay $44.50 per share of CA stock, according to the company.

Donald Trump blocked Broadcom from buying chip competitor Qualcomm

"This transaction represents an important building block as we create one of the world's leading infrastructure technology companies,” Han said.

The companies expect the acquisition to close in the final quarter of this year if the merger is approved by shareholders and regulators.

Broadcom in April transferred its headquarters from Singapore to the US as promised when it tried to buy Qualcomm.

The prior month, President Donald Trump issued an order barring the proposed hostile takeover of Qualcomm, citing what he called "credible evidence" such a deal "threatens to impair the national security of the United States."

An earlier letter from the US Treasury Department warned that a takeover might hurt US leadership in 5G. The fifth-generation wireless networks are already being developed in China, and are currently being rolled out in the UK. American security experts claim that technology developed in the Chinese state is closely tied to the government.