Zscaler’s CEO dismisses Broadcom takeover rumors

Zscaler CEO Jay Chaudhry dismissed claims that the company is in talks with Broadcom about a potential acquisition.

Chaudhry moved to LinkedIn earlier this week to respond to online speculation suggesting Broadcom could target the security firm in a $38 billion deal.

Initial speculation was sparked by reports from a Substack account dubbed “Cyber stand” which quoted “people familiar with the discussions.”

Chaudhry responded to these claims, stating on LinkedIn that the company is not currently accepting offers.

“There are rumors circulating in smaller trade publications and websites that Broadcom is in talks to acquire Zscaler,” he wrote.

“I want to make it clear that neither I nor Zscaler’s management is seeking or accepting any offers to acquire Zscaler. Any reports claiming otherwise are false.”

Chaudhry added that Zscaler investors should visit the company’s website, blogs and SEC filings for official information about its business.

“We encourage our investors and others to review the information we publish in these locations as such information may be considered material,” he said.

Cyber stand stated that it stood by its reporting despite Chaudhry’s comments.

Regardless of speculation, the acquisition of Zscaler would be the second major deal for Broadcom in as many years after purchasing VMware.

However, things haven’t been smooth sailing for Broadcom since the deal was struck in October 2023. Since then, the company has embarked on a comprehensive modernization of its VMware offering, prompting criticism from both customers and industry stakeholders.

Zscaler’s Q2 2024 earnings reports show that the company performed well throughout the quarter, posting a 35% year-over-year revenue increase to $525 million. All financial results were in line with the above expectations, Chaudhry commented at the time.

In March, Zscaler also announced the acquisition of Israeli cybersecurity startup Avalor for $350 million.

Broadcom has previous ties with Zscaler. In 2020, the zero trust specialist agreed to pay Broadcom $15 million to settle a lawsuit filed by Symantec that accused Zscaler of patent infringement.

Symantec filed a lawsuit against the company three months after Broadcom acquired Symantec Enterprise Security, and the settlement granted Zscaler a “patent license, release and covenant not to sue.”