Some people like buying houses in lots of different places. Larry Ellison comes to mind. Some companies like to buy businesses that have nothing to do with their own. Coca-Cola once owned Columbia Pictures, presumably on the assumption that marketing sugar water ought not be that different from marketing movies. General Electric owned an investment house, Kidder Peabody. Jack Welch famously hated the compensation plans for star bankers, a different bunch than salute-and-follow-orders GE managers.

Broadcom, the semiconductor company formerly known as Avago, likes to buy things too. Given its Chinese ties, though, buying chipmakers has become more difficult (though in April it officially re-domiciled to the United States from Singapore). So the acquisitive company, acting more like a buyout firm than a manufacturer, has turned to software. It announced a $19-billion deal to purchase CA Technologies, the once-scandal-plagued mainframe-computer software maker formerly known as Computer Associates–and a serial acquirer itself back in the day.

Chip investors are puzzled by the move. “We guess we are going to be giving ourselves a crash course in mainframe and enterprise computing,” Ambrish Srivastava, an analyst with BMO Capital Markets, wrote to clients. Software analysts, meantime, smell opportunity. “We …read more

Source:: – Tech


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