Analysts: Broadcom could now target Mellanox acquisition

Eyal Waldman

Thwarted in its attempts to buy Qualcomm, the Singapore chipmaker may expand through smaller acquisitions.

Several analysts have speculated that Singapore-based chipmaker Broadcom may now target Israeli big data connectivity company Mellanox Technologies Ltd. (Nasdaq:MLNX) after its $117 billion takeover bid for Qualcomm was thwarted by US President Donald Trump in the name of national security.

"Reuters" reports that analysts covering the chip sector believe that Broadcom will now switch its attention to other potential, albeit small acquisitions. High up on Broadcom's possible shopping list, according to the analysts are Xilinx (market cap $19.4 billion) and Yokneam-based Mellanox (market cap $3.8 billion). Analyst B. Riley cites Mellanox as a possible acquisition, although adds that the Israeli company might be too small.

Mellanox, founded by CEO Eyal Waldman, develops, manufactures and markets communications equipment including chips, cards, switches and cables for swift data transmission for enterprises using Infiniband and Ethernet technologies.

Mellanox is currently the focus of a proxy campaign by party-at-interest activist shareholder Starboard Fund, which is demanding to change the composition of the board of directors, claiming that the company is underperforming in terms of operational profitability. Starboard accuses board members of being entrenched in their positions and has revealed that Mellanox refused to discuss an offer to buy it by Marvell, which instead acquired Mellanox's rival Cavium for $6 billion.

Published by Globes [online], Israel business news - - on March 14, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Eyal Waldman
Eyal Waldman
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