Hock Tan: The CEO Behind the Tech Industry’s Largest Deal

The 63-year-old chief executive of Avago Technologies Ltd. stepped into the limelight on Thursday with a $37 billion cash-and-stock deal to buy Broadcom Corp. The transaction would meld two companies with complementary sales of communications chips, including processors that handle different chores in smartphones from Apple Inc. and Samsung Electronics Co.

It also would continue the CEO’s practice of using debt to finance takeovers of bigger name firms with larger workforces, shedding nonessential operations and staff and taking other steps to boost profit margins.

“He has a unique ability to run a big business as if it were a small business,” said Kenneth Hao, an Avago director and managing partner at Silver Lake, the chip maker’s second-largest investor.

People who have worked with him say he spends little time on anything but work, preferring to let results speak for themselves. Those include his $6.6 billion deal in 2013 for LSI Corp., which roughly doubled Avago’s size, despite the fact that Mr. Tan sold off LSI operations that some industry executives had deemed promising.

One of Mr. Tan’s hallmarks is to rein in spending on speculative projects, colleagues say, focusing on chips with established customers and favorable profit margins. Avago, they note, sells many parts whose technology originated in developments decades ago at H-P and AT&T.

Read more: The Wall Street Journal

 

Chief Executive :Chief Executive magazine (published since 1977) is the definitive source that CEOs turn to for insight and ideas that help increase their effectiveness and grow their business. Chief Executive Group also produces e-newsletters and online content at chiefexecutive.net and manages Chief Executive Network and other executive peer groups, as well as conferences and roundtables that enable top corporate officers to discuss key subjects and share their experiences within a community of peers. Chief Executive facilitates the annual “CEO of the Year,” a prestigious honor bestowed upon an outstanding corporate leader, nominated and selected by a group of peers, and is known throughout the U.S. and elsewhere for its annual ranking of Best & Worst States for Business. Visit www.chiefexecutive.net for more information.