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Monday, September 12, 2011

Chipmaker Broadcom to purchase NetLogic for $3.7 bln, (NASDAQ: BRCM), (NASDAQ: NETL)

Chipmaker Broadcom Corp (BRCM.O) plans to purchase NetLogic Microsystems Inc (NETL.O) for about $3.7 billion to expand its lineup of chips used in wireless network equipment to take advantage of growing demand for mobile data services on devices such as cellphones. The $50-per-share deal, which represents a premium of 57 percent over NetLogic's Friday close of $31.91 on Nasdaq, sent NetLogic's shares soaring 50 percent in morning trading on Monday. While some analysts questioned the steep price on a conference call on Monday, Broadcom executives said they expect strong earnings and revenue growth from NetLogic, whose chips process data traffic on wireless networks. Chief Executive Scott McGregor said the deal is about "significantly expanding" the addressable market for Broadcom, which already sells different types of chips to the same network equipment makers that use NetLogic products.

Broadcom Corporation (Broadcom) is a provider of semiconductor for wired and wireless communications. Shares of BRCM fell by 1.7% or $-0.57/share to $32.87. In the past year, the shares have traded as low as $30.71 and as high as $47.39. On average, 8544670 shares of BRCM exchange hands on a given day and today's volume is recorded at 4287013.

NetLogic Microsystems, Inc. is a semiconductor company that designs, develops and sells processors and high-speed integrated circuits that are used to enhance the performance, functionality and energy efficiency of advanced mobile wireless infrastructure, data center, enterprise, metro Ethernet, edge and core infrastructure networks. Shares of NETL traded higher by 50.33% or $16.06/share to $47.97. In the past year, the shares have traded as low as $22.95 and as high as $43.71. On average, 1502760 shares of NETL exchange hands on a given day and today's volume is recorded at 16875484.



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