Avago to buy chipmaker Broadcom for about $37B

NEW YORK (AP) — Avago Technologies is buying rival chipmaker Broadcom in a cash and stock deal worth about $37 billion.

The deal, announced today, comes at a time when technology stocks are booming and the companies that make the guts for tablets and smartphones are looking for ways to grow aggressively.

Avago says the deal will give it the most diversified communications platform in the chip industry. The combined company will be worth $77 billion and is expected to post annual revenue of $15 billion.

Avago will pay $17 billion in cash, along with the equivalent of about 140 million Avago shares, which were worth about $20 billion when the markets closed Wednesday.

Broadcom shareholders will be able to trade each of their current shares for either a cash payment of $54.50, or 0.4378 shares of the new company's stock. When the deal closes, Broadcom shareholders will own about 32 percent of the combined company.