Avago Tech is buying Broadcom for $37 billion

Broadcom employees

(Facebook/Broadcom)

Avago Technologies is acquiring Broadcom for $37 billion.

A report by The Wall Street Journal on Wednesday indicated that both companies were in advanced stages of talks about a deal.

It is a cash and stock deal, with Avago offering Broadcom shareholders $17 billion in cash and $20 billion of its own shares.

A statement Thursday morning confirmed the deal, and Bloomberg noted that this would be the largest ever merger between chip makers.

"Today's announcement marks the combination of the unparalleled engineering prowess of Broadcom with Avago's heritage of technology from HP, AT&T, and LSI Logic, in a landmark transaction for the semiconductor industry," Avago CEO Hock Tan said in the statement.

"The combination of Avago and Broadcom creates a global diversified leader in wired and wireless communication semiconductors," Tan said.

Broadcom shares spiked 21% on Wednesday after initial reports of a deal; Avago jumped by as much as 6%. In premarket trading Thursday, Avago shares rose 3% while Broadcom shares fell less than 1%.

Broadcom is one of the largest semiconductor companies in the world, and its clients include Samsung, Apple, and Amazon.

Avago, based in California and Singapore, has made at least three acquisitions in the past 13 months.

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