What does COBOL have to do with wireless semiconductors?
It’s not clear, but it’s a relevant question this afternoon as The Wall Street Journal’s Dana Cimilluca and Dana Mattioli report that Broadcom (AVGO), the wireless chip giant that competes with Qualcomm (QCOM), has agreed to pay $18 billion, or $44.50 per share, to buy CA (CA), also known as “CA,” formerly Computer Associates, citing multiple unnamed sources.
A deal announcement could come later today, the authors write.
The deal price would be a 20% premium to CA’s $37.21 close on Wednesday. Ergo, CA shares are up $5.98, or 16%, at $43.19.
Aside from CA being based in New York City, and Broadcom being based in San Jose, Calif., this may not be the deal that investors had in mind when the company’s CFO said back in March that Broadcom saw lots of M&A prospects, in the wake of its failed effort to buy Qualcomm.
Although CA is a diversified software provider, its legacy lies in tools for mainframe software development, such as for the COBOL programming language, and IBM’s (IBM) “CICS.”
Broadcom stock is down $11.86, or 5%, at $231.58, in late trading.
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