Avago Technologies has just acquired Broadcom Corporations, co-owned by Henry Samueli, for $37 billion. Avago is offering Broadcom shareholders $17 billion in cash and 140 million Avago shares valued at $20 billion. The $37 billion price tag represents a premium of about 28 percent over Broadcom’s pre-deal market value of $28.85 billion.
Broadcom is best known for its connectivity chips, which are used widely in smartphones made by Apple and Samsung Electronics. The combined company will be based in Singapore and retain the Broadcom moniker. It will be the third-largest U.S. semiconductor behind Intel and Qualcomm. The new conglomerate is expected to have annual revenues of $15 billion and a value of $77 billion.
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Samueli co-founded the company, with one of his former students, Henry Nicholas in 1991, while still working as a professor at UCLA. Each invested $5, 000 and they worked out of Nicholas’ Redondo Beach home and took the firm public three years after that. In 1998 Broadcom became a publicly traded company, and Samueli was able to quit his job as a professor. Most people would agree it was a nice return on his original investment. Samueli seemed pleased with the development.
“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, ” Samueli said in a statement.
“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 company, ” added Nicholas.
This mega-deal is just another step in the remarkable life-story of Henry Samueli. Samueli was born to Jewish parents who survived the Holocaust and fled Europe empty handed. They opened a liquor store in Los Angeles where Samueli grew up. He worked hard to help the family while studying hard at school, eventually earning a PHD in electrical engineering and has 75 registered patents to his name. His hard work has paid off and Forbes listed him at #782 in the world with an estimated personal fortune of $2.6 billion.
Samueli comes to Israel frequently and of the more than 60 acquisitions that Broadcom has made over the years, 11 were in Israel, totaling roughly $2 billion. He was quoted as saying, “It’s actually somewhat amazing — no matter what technology we need, there is usually an IsraeIi company already doing it, and they are often the best in the world at it.”
Israel is Broadcom’s second largest site outside of the US, with 800 employees. Samueli recently received a prize from the Israeli government for his global contributions to innovation, and his contribution to innovation in Israel, at the Innovex conference for innovation in technology. Broadcom is currently building a development center in Nazareth, which will employ Jews and Arabs.
Samueli is well-known for being the owner of the NHL’s Anaheim Mighty Ducks, but his low-key philanthropy is much more impressive. In a recent Globes article, it was reported that he has joined the Bill Gates and Warren Buffett’s “Giving Pledge, ” which requires the pledge takers to donate half of their wealth to charity in their lifetimes. He credited this to his Jewish heritage, saying, “A lot of this comes from Jewish culture, and the idea of tzedakah, charity.”
Samueli also became very interested in alternative medicine through his wife, leading him to establish the Susan Samueli Center for Integrative Medicine.
