Broadcom abandons $912 million hostile bid to acquire Emulex

Telecom products semiconductors maker Broadcom Corporation has abandoned its $912 million hostile bid to acquire Emulex after Emulex's board of directors had rejected the bid as too low.

Broadcom said in a statement that it would allow its previously announced tender offer for Emulex stock to expire at midnight Eastern Time on 14 July 2009.

Scott McGregor, president and CEO of Broadcom said, ''Broadcom believes it is in the interest of each company's stakeholders to complete a transaction expeditiously or to move on."

"Although we were unable to negotiate an expeditious and friendly transaction at a price that makes sense to us given the expectations set by the Emulex Board, there are other value-creating alternatives that we will now turn our attention to as we position Broadcom to capitalise on the emerging opportunities in the converged enterprise networking markets,'' he added.

Emulex became an attractive acquisition target for Broadcom since Emulex's technology for transporting information from data centres to storage systems is fast, reliable and difficult to emulate, an area that Broadcom has been trying to enter for years in vain.

Broadcom, whose 2008 revenue was $4.66 billion, makes chips for servers but Emulex designs chips that make these servers connect to large storage disks that transports huge amount of data and the combined company could come up with a single chip doing both jobs effectively.