Broadcom Makes $130B Unsolicited Bid for Qualcomm

Randall Padilla
November 7, 2017

The proposed offer is the largest deal ever in the tech industry, The Associated Press reports.

Hock Tan, president and CEO of Broadcom, said in a statement: "This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products".

Qualcomm shareholders would get $60 in cash and $10 per share in Broadcom shares in a deal.

While the value of the proposed bid has yet to be made public it is expected that the offer will be in the range of around $70 to $80 per share, valuing Qualcomm at over $100billion. We note that Broadcom's bid is independent of Qualcomm's success in closing its bid for NXP.

Any deal struck between the two companies would face intense regulatory scrutiny. Including debt, Broadcom's bid values the transaction at $130 billion.

According to sources Qualcomm is not aware of the details of Broadcom's bid and the company has yet to make any comment.

Last week, Qualcomm reported revenue of $22.3 billion (£17 billion) for 2017, but Broadcom says the combined company could deliver revenues of around $51 billion (£38.9 billion).

"Broadcom's proposal is compelling for stockholders and stakeholders in both companies". Broadcom already provides designs for Wi-Fi and Bluetooth chips, and by bringing in Qualcomm it will be able to encompass LTE and 5G capabilities.

Qualcomm is also attempting to close its acquisition of NXP Semiconductors NV, one of the largest makers of chips for vehicles.

Broadcom plans to move its headquarters exclusively to the United States, which would allow it to avoid review by the Committee on Foreign Investment in the United States, which reviews foreign ownership of US assets.

A year ago, the company entered a $5.5 billion agreement to merge with USA network provider Brocade Communications Systems, but that has been delayed while it's scrutinized by the Committee on Foreign Investment in the United States. According to reports people involved with Broadcom believe that it will not shy away from initiating a "proxy fight to gain seats on Qualcomm's board of directors in support of its offer".

Other reports by AllAboutTopnews

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