Date
24 November 2017
Broadcom, which has pulled off a string of deals over the past decade, has now set its sights on Qualcomm. Photo: Reuters
Broadcom, which has pulled off a string of deals over the past decade, has now set its sights on Qualcomm. Photo: Reuters

Broadcom launches US$103 bln bid for Qualcomm

Broadcom announced an unsolicited US$103 billion bid for Qualcomm on Monday, setting the stage for a takeover battle among the two US-based chipmakers, Reuters reports.

Qualcomm said it would review the proposal but the company is expected to reject the bid, arguing that it is too low and also fraught with regulatory risk, the report said.

Broadcom Chief Executive Hock Tan told Reuters that he would not rule out a proxy fight to convince shareholders to replace the board and accept the offer.

“We are well advised and know what our options are, and we have not eliminated any of those options,” said Tan, who has pulled off a string of deals over the past decade.

“We have a very strong desire to work with Qualcomm to reach a mutually beneficial deal.”

A combined Broadcom-Qualcomm would become the dominant supplier of chips used in smartphones, and would raise the stakes for Intel, which has been diversifying from its stronghold in computers into smartphone technology by supplying modem chips to Apple, the report noted.

Under Broadcom’s proposal, Qualcomm shareholders would get US$60 in cash and US$10 per share in Broadcom stock, Including debt, the transaction is worth US$130 billion.

Any deal struck between the two companies would face intense regulatory scrutiny, especially in China, which is home to expanding rivals. 

Qualcomm sells modem chips that allow phones to send data, as well as communications chips for automobiles that handle “infotainment” systems and wireless electric vehicle charging.

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RC

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