Irvine-based Broadcom Corp.’s pending $37 billion sale to Avago Technologies Ltd. in Singapore has passed one of the first regulatory hurdles.
The deal passed the mandated waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, clearing any concerns on U.S. antitrust law.
The combined company, known as Broadcom Ltd., would become the third largest chipmaker in the world, with estimated annual revenue of about $15 billion. Broadcom last year had $8.4 billion in sales, and Avago had about $4.3 billion for the 12 months ended Nov. 2.
It will have a market value of about $77 billion, well shy of Santa Clara-based Intel Corp.’s $138.2 billion and Qualcomm Corp.’s $97.5 billion. Intel had sales of $55.9 billion, and San Diego-based Qualcomm posted revenue of $27.5 billion in the past 12 months.
The deal would carry a $1 billion termination fee if it fell through, according to regulatory filings. Either company would have to front the bill depending several scenarios that include accepting a higher bid if the transaction isn’t completed by the termination date or if shareholders veto the deal, among other triggers.
The sale is expected to close in the first quarter of 2016.
Aged Out
The upcoming retirement of Western Digital Corp. Chairman Tom Pardun was prompted by a growing policy trend among public companies: age limits.
Pardun, who had served on the board of the Irvine-based storage products maker for 22 years, is nearing the company’s mandatory retirement age of 72.
Nearly three-quarters—73%—of the boards of S&P 500 companies now have mandatory retirement ages, according to a study published last year by Chicago-based executive search and advisory firm Spencer Stuart.
The trend toward regular lineup shifts in the boardroom is particularly true in the fast-changing world of technology and has recently played out locally.
Irvine-based Newport Corp., which makes lasers and related equipment, went to great lengths in the past few years to revamp its board with big names in the science and corporate worlds. Father Time was the catalyst when three of its directors were forced to retire in the past three years as each neared a mandatory retirement age of 73.
The trend also has been pushed along in today’s era of activist investors, although the recent local examples didn’t fit that bill.
Former Western Digital Chairman and Chief Executive Matthew Massengill, 54, is set to regain the top board seat following Pardun’s retirement in November.
Massengill has been on the board since 2000 and served as chief executive from 2000 to 2005. He’s also a director at Microsemi, Conexant and GT Solar.
Nicholas Looked Over
It seems Forbes left out one big local name in its recent profile on the richest people in tech.
The business pub included Broadcom cofounder Henry Samueli while omitting fellow cofounder
Henry Nicholas, who checked in at No. 9 on the Business Journal’s recently published OC’s Wealthiest list, with $2.2 billion in assets.
Forbes’ cutoff was $2 billion and listed Samueli’s worth at $2.5 billion, good for No. 82. We had Samueli at No. 5 with an estimated worth of $3 billion.
Forbes has Fountain Valley-based Kingston Technology Inc. founders David Sun and John Tu tied at No. 41 with a cool $4.5 billion each. We had a more tempered estimate for the duo who helped commoditize USB drives and flash cards, with each at $3.5 billion—still good enough for the No. 2 spot.
