Avago to buy Broadcom for $37B



Avago Technologies and Broadcom announced that they have entered into a definitive
agreement under which Avago will acquire Broadcom in a cash and stock
transaction that values the combined company at $77 billion in
enterprise value. Upon completion of the acquisition, the combined
company will have the most diversified communications platform in the
semiconductor industry, with combined annual revenues of approximately
$15 billion.

"Today's announcement marks the combination of the unparalleled
engineering prowess of Broadcom with Avago's heritage of technology
from HP, AT&T, and LSI Logic, in a landmark transaction for the
semiconductor industry," said Hock Tan, President and Chief Executive
Officer of Avago. "The combination of Avago and Broadcom creates a
global diversified leader in wired and wireless communication
semiconductors. Avago has established a strong track record of
successfully integrating companies onto its platform. Together with
Broadcom, we intend to bring the combined company to a level of
profitability consistent with Avago's long-term target model."

"This transaction benefits all of Broadcom's key stakeholders,"
remarked Scott McGregor, President and Chief Executive Officer of
Broadcom. "Our customers will gain access to a greater breadth of
technology and product capability. For our shareholders, the
transaction provides both compelling up-front value as well as the
opportunity to participate in the future upside of the combined

"When Henry Nicholas and I founded Broadcom, we had a vision of
creating the world leader in communications semiconductors. Today's
announcement is a continuation of that vision and we could not think of
a better partner for the future than Avago," stated Dr. Henry Samueli,
Co-Founder, Chief Technical Officer and Chairman of the Board of

"The culture that Henry and I created when we founded Broadcom was
demanding, execution-oriented, and certainly not guaranteed to mesh
with the average technology company," said Dr. Henry T. Nicholas,
Co-Founder and past CEO of Broadcom. "It was, however, a culture that
enabled Broadcom to grow exponentially and emerge as the market leader
in every major market segment involving broadband communications. In
Avago, we have found a culture and a management team that embody the
best of the philosophies on which Broadcom was founded, together with a
fast-paced, no-nonsense, process-driven business culture that we need
to take our combined company to the next level. I am confident that,
under the visionary leadership of Hock Tan, the combined company will
realize its potential to be the world's greatest semiconductor

Following completion of the transaction, Mr. Tan, President and Chief
Executive Officer of Avago, will continue to serve as President and
Chief Executive Officer of the combined company, which will adopt the
name Broadcom Limited. Dr. Samueli will join the board of the combined
company as will another director from Broadcom. In addition, Dr.
Samueli will be appointed Chief Technology Officer of the combined
company. Dr. Nicholas will serve in a strategic advisory role within
the combined company, reporting to Mr. Tan.

Transaction Structure and Terms

Under the terms of the definitive agreement, Avago will acquire
Broadcom for $17 billion in cash consideration and the economic
equivalent of approximately 140 million Avago ordinary shares, valued
at $20 billion as of May 27, 2015, resulting in Broadcom shareholders
owning approximately 32% of the combined company. Based on Avago's
closing share price as of May 27, 2015, the implied value of the total
transaction consideration for Broadcom is $37 billion.

Holders of outstanding shares of Broadcom will have the ability to
elect to receive, for each Broadcom share held: (i) $54.50 in cash;
(ii) 0.4378 ordinary shares in a newly-formed Singapore holding company
("HoldCo"); (iii) a restricted equity security that is the economic
equivalent of 0.4378 ordinary shares of HoldCo that will not be
transferable or saleable for a period of one to two years after
closing; or (iv) a combination thereof. The shareholder election will
be subject to a proration mechanism, which is anticipated to result in
payment in the aggregate in the range of 50% cash and 50% equity in the
transaction. Upon closing of the transaction, Avago shareholders will
exchange their ordinary shares for HoldCo ordinary shares on a one to
one basis.

No trading market is expected to develop for the restricted equity. The
receipt of the restricted equity is expected to be tax free to former
Broadcom shareholders, and if a requested tax ruling is obtained from
the IRS, the receipt of HoldCo ordinary shares will also be tax free to
the Broadcom shareholders. Receipt of HoldCo ordinary shares by former
Avago shareholders is expected to be tax free.

Avago intends to fund the $17 billion of cash consideration with cash
on hand from the combined companies and $9 billion in new,
fully-committed debt financing from a consortium of banks.

The transaction has been unanimously approved by the boards of
directors of both companies, as well as a special committee of the
independent directors of Broadcom. Dr. Samueli and Dr. Nicholas, the
founders of Broadcom, have signed support agreements to vote to approve
the transaction. Closing of the transaction is expected by the end of
the first calendar quarter of 2016, and is subject to regulatory
approvals in various jurisdictions, as well as the approval of Avago's
and Broadcom's shareholders.

Conference Call
Avago and Broadcom management will host a conference call to discuss
details of the transaction. A live webcast and the accompanying
presentation relating to the transaction will be available in the
"Investors" section of Avago's website at www.avagotech.com in advance
of the conference call.

Conference call date: May 28, 2015
Time: 5:00am Pacific (8:00am Eastern)
Dial in #: US (877) 703-6103, International +1 (857) 244-7302
Passcode is 44092275

A replay of the call will be available for one week by dialing (888)
286-8010 (US) or +1 (617) 801-6888 (International) and the passcode is
12012367. A webcast of the conference call will also be available in
the "Investors" section of Avago's website.