Avago to acquire LSI for $6.6bn

The combined company will focus on capitalising on the growing opportunities created by the rapid increases in data center IP and mobile data traffic. The transaction is expected to be significantly and immediately accretive to Avago's non-GAAP free cash flow and earnings per share.

Hock Tan, President and Chief Executive Officer, Avago, commented: "This highly complementary and compelling acquisition positions Avago as a leader in the enterprise storage market and expands our offerings and capabilities in wired infrastructure, particularly system-level expertise. This combination will increase the Company's scale and diversify our revenue and customer base. In addition to these powerful strategic benefits, as we integrate LSI onto the Avago platform, we expect to drive LSI's operating margins toward Avago's current levels, creating significant additional value for stockholders."

The transaction has been approved by the boards of directors of both companies and is subject to regulatory approvals in various jurisdictions and customary closing conditions, as well as the approval of LSI's stockholders.

"This transaction provides immediate value to our stockholders, and offers new growth opportunities for our employees to develop a wider range of leading-edge solutions for customers. Our leadership positions in enterprise storage and networking, in combination with Avago, create greater scale to further drive innovations into the datacenter," comments Abhi Talwalkar, President and Chief Executive Officer, LSI.