Avago Technologies, which has operations in Longmont and Fort Collins, said Thursday it will acquire fellow chipmaker Broadcom Corp. for $37 billion in cash and stock.
Irvine, Calif.-based Broadcom, which makes wireless chips for smartphones and other devices, also has facilities in Fort Collins and Longmont.
Avago’s Fort Collins campus, , is its largest after its Singapore headquarters and San Jose, Calif., locations.
At the end of 2014, Avago employed 80 in Longmont while Broadcom had 37 workers, according to the Longmont Area Economic Council.
Avago and Broadcom did not respond to requests for more information. But in a statement, Avago referenced a projected cost savings of $750 million in “annual cost synergies” within 18 months after the deal is completed.
The two companies are just a small part of Colorado’s silicon network, which includes Hewlett-Packard and Advanced Micro Devices.
According to the Colorado Office of Economic Development and International Trade, the state had 129 companies in semiconductor or other electronic-component manufacturing industries as of the first quarter of 2015. The companies employ 5,382 workers with an average salary of $90,040. Intel was one of the top employers with 1,900 employees here.
While most companies are not headquartered in the state, the region north of Denver has long attracted chip manufacturers.
Drive down Harmony Road in Fort Collins and you’ll spot Broadcom’s office a block from Avago’s. Nearby is HP, Intel and AMD.
“It’s a vibrant community with people coming here all the time as they exit California,” said Bruce Gammill, who fled northern California and set up the site six years ago. While he hasn’t updated the site for a couple of years, at the time he documented more than 200 companies in the silicon field — “a fraction of what’s out there,” he said.
“The community has changed from manufacturing to more of a design and engineering, which is more valuable. It’s been a good change to go from manufacturing,” Gammill said. “There’s a talent pool here, and it’s a talent pool of migrants from the East Coast and West Coast who want to get out of that lifestyle and come here.”
Avago has a chip fabrication plant and research and development office in Fort Collins. Last week, the U.S. Justice Department accused six Chinese citizens, including , of conspiring to steal wireless trade secrets and take them to China.
In Fort Collins, the Avago plant makes products for wireless communication, wired infrastructure and enterprise storage.
In December, the company said it is expanding the Fort Collins facility “to support anticipated growth in sales of our proprietary products, particularly for our wireless end market,” according to its annual report.
Avago also has a Colorado Springs facility where it has administration and research and development operations.
On Thursday, Avago said that the $37 billion price includes $17 billion in cash and 140 million Avago ordinary shares, which are valued at $20 billion. Broadcom shareholders will own approximately 32 percent of the company.
Combined, the company will have annual revenues of $15 billion, according to Avago.
Tamara Chuang: 303-954-1209, tchuang@denverpost.com or twitter.com/Gadgetress
