Broadcom offers to buy mobile chipmaker Qualcomm for $103 billion

Posted November 07, 2017

Qualcomm's chips and patents affect nearly every smartphone model in the world, and Broadcom is offering $70 a share, which is a 28pc premium on Qualcomm's closing stock price last Thursday (2 November) according to a report in The New York Times. Broadcom has said, however, that its offer stands irrespective of whether the NXP deal goes through or not.

Following rumors over the weekend, chipmaker Broadcom has today confirmed it has approached wireless chipmaker Qualcomm with an acquisition offer that values the company at $130BN (including $25BN of net debt).

Broadcom and Qualcomm are no strangers to acquisitions, with the pair in talks to complete multibillion-dollar deals.

Citing sources, Bloomberg claimed that the Qualcomm board is likely to advise shareholders to reject the deal, while also claiming that any potential deal could run into regulatory problems.

Broadcom is offering a combination cash-and-stock deal of $70 per share.

President Donald Trump appeared with Broadcom Corp.

According to a statement released by the company, Broadcom hopes to increase its share of the advanced semiconductor market and is confident that its proposal will "receive all necessary [regulatory] approvals in a timely manner".

That will help it avoid a cumbersome federal review process for a $5.5 billion deal for USA network provider Brocade Communications Systems.

Qualcomm shares rose up by 3.6 percent in premarket trading this Monday in NY. Broadcom primarily focusses on Wi-Fi and Bluetooth chips.

Adjacent products are often cheaper when offered by one company, according to standard economic theory, which could be good for phone makers and potentially incline regulators toward allowing the deal, said Henry C. Su, a former Federal Trade Commission trial attorney.