Avago Technologies has agreed to buy rival chip maker Broadcom Corp. for $37 billion in cash and stock.
The terms of the deal will see Avago pay $17 billion in cash and $20 billion of its own shares, in what will be the largest pure technology deal on record.
Broadcom, a maker of communication chips for tablets and smartphones, also supplies the Internet links for cable television and telecom devices.
The company posted revenue figures of $8.4 billion last year and is expected to change its name to Broadcom Ltd.
Avago is a former semiconductor unit of HP and makes chips for wireless-communications and corporate data storage markets. The company reported $4.3 billion in sales in the 12 months ended November 2nd.
The merger could help see the combined company start to challenge Intel and Qualcomm who enjoy greater dominance over the market.
Avago has been proactive with acquisitions with it purchasing five companies since 2013 valued at around $8 billion in total, which includes the acquisition of LSI last year for $6.6 billion.
Already this year there have been more than $26 billion in semiconductor deals announced globally, not including this deal, which represents more than double for the same period last year.
