Chipmaker Broadcom bids $130bn for rival Qualcomm

Violet Tucker
November 7, 2017

"Chipmaker Broadcom officially unveiled a $130bn offer, including net debt, for Qualcomm on Monday, in what could be the largest tech deal in history". Rumors of the acquisition started popping up yesterday, and the offer will likely kick off a pitched battle between the two companies and regulators around the world.

"We believe a Qualcomm acquisition could potentially entail Broadcom retaining the $6 billion - 95 percent licensing cash cow and, depending on the leverage, keep [chips] or sell it to another chip OEM".

The Broadcom offer of $70 per share to Qualcomm stockholders would be $60 per share in cash and $10 per share of Broadcom.

Reuters reported that Broadcom had not contacted Qualcomm about the offer prior to Tan's letter.

Both companies now supply Apple with wireless chips and patent licenses, and the deal would make Broadcom the world's third-largest chipmaker after Intel and Samsung.

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Qualcomm is preparing to fend off the unsolicited offer, arguing it undervalues the company, people familiar with the plans have said.

Qualcomm has a (long) pending acquisition, of chipmaker NXP Semiconductors NV, in the works - and Broadcom notes that its offer is not dependent on whether or not Qualcomm manages to close with NXP on the now disclosed terms (it's offering ~$39BN for the Netherlands-based chipmaker which has a focus on car-related applications and also security-based identification).

In a statement, the company said: "Qualcomm Board of Directors, in consultation with its financial and legal advisors, will assess the proposal in order to pursue the course of action that is in the best interests of Qualcomm shareholders". The company has gone so far with its Apple fight that it recently filed a lawsuit seeking to ban sales of the iPhone in China.

Tan visited President Trump at the White House last week to announce that Broadcom would be moving its headquarters from Singapore to Delaware.

Other reports by Guamnewswatch

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