Avago Technologies is in talks to acquire Broadcom. The deal would see the chip provider acquiring its slightly smaller rival for around $35 billion.
The Wall Street Journal report claimed that the deal could be announced as early as 28 May.
This would be the latest in a series of acquisitions for Avago, the most recent of which was Emulex, a provider of network connectivity, monitoring and management hardware and software solutions.
The company was initially founded in 1961 as a division of HP.
"In terms of the overall market, this is an increasing trend for big mergers," said Andrew Norwood, Research VP at Gartner. "There are two distinct motives: a desire for companies to increase their market share both in existing and complementary markets and a desire to move into new markets when they have very slow growth in their own markets."
The capitalisation of the two companies is similar, with Avago’s at $35.47 billion and Broadcom’s at $33.42 billion at the time of writing, according to the Nasdaq. The deal is one of many enabled by the fact that corporations are currently enjoying access to cheap capital.
Broadcom‘s share price rose from $48.19 to close at $57.15. Avago’s rose from around $134 to close at $141.49.
