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Follow UsNEW YORK: Communications chip maker Broadcom Corp. on Monday said it would
buy optical communications chip maker NewPort Communications Inc. in a stock
deal valued at $1.24 billion, extending Broadcom's reach in the fast-growing
fiber optic communications market.
Irvine, Calif.-based Broadcom said it would issue about 5.5 million Class A
common shares in exchange for all of privately held NewPort's preferred and
common stock, employee stock options, warrants and other rights. NewPort is also
based in Irvine.
Broadcom shares closed Friday at 225-1/16 on Nasdaq. In pre-market activity
Monday morning, the stock was up 2-3/16 at 227-1/4.
The deal, expected to close within 60 days, is the 13th acquisition Broadcom
has made since June 1999. The company is striving to become a one-stop supplier
of chips and equipment to link computers, phones and televisions over high-speed
networks.
The deal comes just a week after Broadcom said it would buy Silicon Spice
Inc., a developer of semiconductor technology, for about $1.2 billion. A week
earlier it had unveiled plans to buy Altima Communications Inc., a maker of
networking circuits, for about $533 million.
"The acquisition of NewPort Communications ... is not only synergistic
with our 10-gigabit ethernet technology but is also complementary to the
communications processor technology that we are acquiring through our merger
with Silicon Spice Inc.," Broadcom president and chief executive officer
Henry Nicholas said in a statement. "Together, these acquisitions will
provide Broadcom with a powerful platform to address the rapidly growing area
networking marketplace."
NewPort's current investors include Cisco Systems Inc., the world's largest
producer of networking gear, and Lucent Technologies Inc., the world's No. 1
telecommunications equipment maker, Broadcom said. They are also among its
largest customers.
In connection with the deal, Broadcom said it will record a charge in the
third quarter for acquired in-process research and development.
(C) Reuters Limited 2000.