Broadcom to acquire NetLogic

Broadcom has revealed its biggest-ever acquisition, a $3.7 billion deal for NetLogic Microsystems that is designed to boost Broadcom's position in the market for chips for networking equipment, according to The Wall Street Journal.

The Irvine, California-based company, offered $50 a share for NetLogic, a chip-maker in Silicon Valley that went public in 2004. That is a 57% premium to NetLogic's closing price last week.

“This deal really expands our footprint on the infrastructure and networking side of the house,” Broadcom co-founder and chief technology officer, Henry Samueli, told PCMag.

Although the deal is pending regulatory approval, the boards of directors of both Broadcom and NetLogic have approved it. The deal is expected to close in the first half of 2012.

According to eWeek, NetLogic will also augment Broadcom's catalogue with some new product lines, including digital front-end processors for wireless base stations.

With the acquisition, Broadcom is now better positioned to meet growing demand for integrated, end-to-end communications and processing platforms for network infrastructure, Broadcom CEO Scott McGregor said.