Broadcom to buy NetLogic for $3.7 bn

CALIFORNIA, USA: Wireless chipmaker Broadcom Corp agreed to buy NetLogic Microsystems Inc for about $3.7 billion to extend its range of chipmaking technology for more advanced networks.

Broadcom will pay $50 per share for each NetLogic share, a premium of 57 percent over NetLogic's Friday close of $31.91 on Nasdaq. NetLogic shares rose 51 percent in pre-market trading on Monday.

Broadcom expects the deal to add 10 cents a share to its earnings on an adjusted basis in 2012.

The companies said the transaction has been approved by their respective boards and it is expected to close in the first half of 2012.

Broadcom reiterated that it expects third-quarter revenue around the middle of the previously given range of $1.9 billion to 2 billion with product gross margins flat to slightly higher.

Broadcom expects to have around $4.2 billion in cash on hand by the end of third quarter up from around $3.8 billion at the end of the second quarter.

The companies will conduct a conference call with analysts and investors at 8 a.m. EDT on Monday.