Broadcom Corporation, the provider of integrated circuits enabling high speed broadband communications, said Monday it has agreed to buy optical communications chip maker NewPort Communications Inc. in a stock deal worth $1.24 billion, extending Broadcom's reach in the fast-growing fiber optic communications market. Under the deal, Broadcom's 13th since June last year, the Irvine, Calif.-based company will issue about 5.5 million shares in exchange for all of privately held NewPort's preferred and common stock. In morning trade, shares of Broadcom rose $7.50, or 3.3%, to $232.5625. The proposed acquisition comes a week after Broadcom said it would buy Silicon Spice Inc., a developer of semiconductor technology, for about $1.2 billion. A week earlier it agreed to buy Altima Communications Inc., a maker of networking circuits, for about $533 million. "The acquisition of NewPort Communications...is not only synergistic with our 10-gigabit ethernet technology but is also complementary to the communications processor technology that we are acquiring through our merger with Silicon Spice Inc.," Broadom President and Chief Executive Officer Henry Nicholas said. "Together these acquisitions will provide Broadcom with a powerful platform to address the rapidly growing wide area networking marketplace." NewPort, Sumitomo Electric Industries Ltd. and Cisco Systems Inc. are customers of NewPort and also own stakes in the company. Broadcom said it will take an unspecified third-quarter charge for research and development costs related to the acquisition. End

[slug: BROADCOM-NEWPORT] [symbols:US;BRCM] [symbols:US;BRCM]

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