Boston, MA 08/14/2014 (wallstreetpr) – Avago Technologies Ltd (NASDAQ:AVGO) recently announced that it has agreed to sell Axxia Networking Business of LSI to Intel Corporation (NASDAQ:INTC) in an all-cash transaction worth $650 million.
Major Highlights of the Transaction
The $650 million deal between the two companies was approved by Board of Directors of both, Intel and Avago.
The companies announced that the deal would be finalized in fourth quarter of the present fiscal after customary closing conditions and government approval. The definitive agreements were signed between Intel Corporation and Avago Technologies on August 13, 2014.
Intel Corporation (NASDAQ:INTC), which is said to be the global leader in computer innovation, will seek benefit from acquisition of Axxia Networking Business for serving corporate responsibilities as well as sustainability.
Avago Divesting Units
The Axxia Networking Business primarily encompasses infrastructure and networking products for enterprise gateways and wireless networks. LSI was acquired by Avago Technologies Ltd (NASDAQ:AVGO) in December 2013 in a deal worth $6.6 billion. The company is now keen on divesting the units because it is chasing volatility in the wireless business, while the eyes zeroed in on chip market, which promises faster growth.
The Axxia Networking Business is being divested from its parent company now after completion of Avago acquisition of LSI. In the previous year, this networking business generated revenues worth $113 million. Also, it employs around 650 people.
The extensive product portfolio of Avago is segregated into four main markets, viz. Industrial & others, wireless communications, wired infrastructure and enterprise storage.
Flash Storage Business also Sold
Avago Technologies Ltd (NASDAQ:AVGO), which specializes in analog semiconductors and had remained a unit of Hewlett-Packard Company (NYSE:HPQ) at some point of time, in May 2014 announced that it would also sell the flash storage business of LSI to Seagate Technology PLC (NASDAQ:STX), which is the hard drive maker. This transaction would be worth $450 million in cash.
