Broadcom Makes $130B Unsolicited Bid for Qualcomm

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Broadcom today (6 November) revealed a $105bn takeover bid for Qualcomm, a move that would see the creation of a giant in the chip-making world.

One aspect that might be an issue is Qualcomm's efforts to close its $38-billion acquisition of NXP Semiconductors NV, which makes chips for vehicles with an eye to self-driving technology.

Since publication Broadcom and Qualcomm have confirmed the offer, with Broadcom disclosing that the bid of $70 a share is made up of $60 cash and $10 in Broadcom shares.

Qualcomm is already preparing to fend off the unsolicited bid, arguing that it undervalues the company, according to people familiar with the matter. It is firm that its pool of patents remains a highly valuable asset and its work on defining 5G network roll-out deserves a larger price.

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.

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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). Here's a wrap of what they've said so far.

"This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products", Hock Tan, resident and chief executive officer of Broadcom, said in a statement Monday.

"Broadcom's proposal is compelling for stockholders and stakeholders in both companies".

"Broadcom management comments about "confidence that our common global customers would embrace the proposed combination" could mean that the company has had discussions with large OEMs like Apple and Samsung".

Broadcom facility in Silicon Valley.

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