Broadcom to Buy Element 14

Broadcom Corp., the No. 1 maker of chips for cable modems, agreed to buy the Britain’s Element 14 Inc. for $641.1 million in stock to gain chips for high-speed Internet service delivered on telephone lines. Irvine-based Broadcom will pay about 2.65 million Class A common shares for closely held Element 14, which doesn’t have any revenue. Element 14, based in Cambridge, England, will reduce Broadcom’s earnings per share by 1.5 cents a quarter through the end of next year, Broadcom Chief Financial Officer Bill Ruehle said. Broadcom is adding chips for asymmetric digital subscriber line--or ADSL--gear, which delivers faster Internet connections than common dial-up modems. Broadcom also will record expenses in the fourth quarter related to the purchase. It wasn’t more specific. Broadcom shares rose $17.69, or 8%, to close at $241.94 on Nasdaq.