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COMING UP:Share Opener Variant 1



>> It's the most bizarre defocused, non strategic acquisition of the last decade. That's just one of the many direct analysts quotes, knocking down Thursday's announcement that chief maker Broadcom's offering to buy software company CA. It's a deal that's leaving investors and analysts, scratching their heads. Reuters Breakingviews columnist Rob Cyran.
>> Broadcom is a roll up of chip companies, what they've done they are a chip companies, buy other chip companies they cut costs and they deliver lots of profits and that's worked out really well. Now, they're suddenly saying hey, let's buy this software company instead, there's no obvious synergies between the two.
There's no obvious strategic rationale why a chip company should own a software company. Besides it's just a deal maker who wants to do another deal. And that's caused investors to freak out a bit saying, you're buying into a sector you don't understand. That's probably gonna be a recipe for capital destruction.
>> Freak out indeed. Broadcom shares nosediving as much as 19% Wednesday, wiping out a hefty $15 billion in market value. That's nearly equal to the $19 billion it offered to pay for CA. The deal comes as another high-profile embarrassment for Broadcom, its hostile $117 billion mega-merger with Qualcomm went down in flames.
Blocked by the Trump administration on national security concerns. Since then, Broadcom switched headquarters back to the US from Singapore to avoid that kind of regulatory scrutiny and is now on the prowl. But investors think the CA deal is all wrong.