Most analysts believe that Broadcom will abandon the acquisition of Qualcomm, and San Jose chip maker Xilinx and Israeli Mellanox Technologies company is likely to be Broadcom's next acquisition target.
Analyst Stacy Rasgon, of Bernstein Research, a Bernstein research firm, said: "it remains to be seen whether Benton will take other steps to continue to pursue the acquisition of Qualcomm, but it will take a long time to do so." Coupled with the tough stance of U.S. regulators, we think the potential deal is coming to an end. "
Craig Ellisi, an analyst at investment research firm B Riley, said: "We think that Bantone will continue to focus on M & A in the communications sector or be complementary to its own products."
If so, San Jose chipmaker Xilinx and Israel Mellanox Technologies are likely to be Broadcom's next acquisition targets. Xilinx's chip products are used in wireless communications, while Mellanox's product connectionsserverAnd storage systems, complementary to Broadcom's current products.
Currently, the market value of Xilinx is about 20 billion U.S. dollars, while Mellanox Technologies is less than 4 billion U.S. dollars.
Broadcom CEO Chen Fuyang made a success of today’s Broadcom through a series of bold acquisitions. In 2006, Chen Fuyang took the position of CEO of Avago Technologies. In less than 10 years, the market value of Avago Technologies has grown from US$3.5 billion to more than US$100 billion.
In 2015, Avago Technologies announced a $37 billion acquisition of Broadcom. Two years later, Broadcom acquired Brocade Communications Systems, a network equipment manufacturer, for $5.5 billion.
For small M&A transactions like Mellanox Technologies, Broadcom still has sufficient ammunition. According to analyst estimates, Broadcom currently has approximately $11 billion in cash and approximately $9 billion in free cash flow each year.