IT&Software

Broadcom bids $130 Billion to acquire Qualcomm

Broadcom bids $130 Billion to acquire Qualcomm

Broadcom's offer is at a premium of 27.6 percent to Qualcomm's closing price of $54.84 on Thursday, a day before media reports of a potential deal pushed up the company's shares.

On Nov. 6, Broadcom announced an unsolicited bid to acquire Qualcomm for $70 per share ($60 in cash and $10 in stock) in a deal valued at $130 billion, assuming that Qualcomm's ongoing bid to acquire NXP Semiconductors for $38 billion goes through. Qualcomm said that it is reviewing the bid, and that it will have no comment until that review is completed by its board.

First reported by Bloomberg, Broadcom is said to be readying an assault on publicly listed Qualcomm and planning to offer shareholders $70 a share.

Many analysts are saying Broadcom is making the play while Qualcomm's business is weaker than usual, as it continues its legal battle with Apple and saw its shares tumble as the company threatens to remove its chips from its smartphones.

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Perhaps the most important new news on the bid is that Qualcomm is expected to reject this deal as it undervalues the company.

The bid comes as Broadcom plans to move its headquarters to the United States from Singapore. NXP is one of the largest makers of chips for vehicles and expanding into self-driving technology, and Broadcom also is open to acquiring NXP, according to one of the sources.

Broadcom president and CEO Hock Tan called the proposal "compelling for stockholders and stakeholders in both companies", and claims a deal would position the combined company as "a global communications leader".

Antitrust concerns over a Broadcom-Qualcomm deal also may be muted because the companies have few areas of overlap beyond Wi-Fi solutions for wireless routers, Bluetooth drivers and some RF semiconductors, said Rob Lineback, a research analyst at IC Insights.