Jim Cramer is bullish on the $4.0 billion Broadcom-KKR deal: here’s why

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on Feb 26, 2024
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  • Broadcom is selling its EUC business to KKR for $4.0 billion.
  • Jim Cramer shares his view on the deal announced today.
  • Broadcom stock is trading at an all-time high on Monday.

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Famed investor Jim Cramer is bullish on a deal Broadcom Inc (NASDAQ: AVGO) announced this morning with KKR – a private equity firm.

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Broadcom to sell its EUC unit to KKR

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Broadcom agreed to sell its end-user computing (EUC) business to KKR for $4.0 billion on Monday.

Shares of the semiconductor company popped more than 1.0% today to print an all-time high and the Mad Money host expects them to move further up in the coming months.

Cramer is bullish on the Broadcom-KKR deal as it helps the chipmaker streamline its portfolio following its over $60 billion acquisition of VMware in 2023.

Note that the famed investor has been constructive on $AVGO for the longest time. His Charitable Trust does have a position in the Nasdaq-listed firm that has more than doubled in the trailing twelve months.

Broadcom-KKR deal will help reduce debt

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Jim Cramer is bullish on the $4.0 billion Broadcom-KKR deal also because it will help the multinational to lower the debt on its balance sheet.

Hock Tan – the chief executive of $AVGO recently announced plans of “aggressively” buying back stock; and unloading the EUC unit will enable the California-based company to do just that, he added.

The Mad Money host is positive on Broadcom Inc also because it partnered with Nvidia Corp on developing silicon photonics last year.

Broadcom shares currently pay a dividend yield of 1.60% that makes up for another good reason to have it in an investment portfolio.

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