Chipmaker Broadcom bids $130bn for rival Qualcomm

Chipmaker Broadcom bids $130bn for rival Qualcomm

Chipmaker Broadcom bids $130bn for rival Qualcomm

The Broadcom offer of $70 per share to Qualcomm stockholders would be $60 per share in cash and $10 per share of Broadcom.

Chipmaker Broadcom has put in a $103 billion offer to buy rival Qualcomm Inc, in what could mark the biggest technology acquisition in history.

Qualcomm is reportedly not that thrilled about the unsolicited offer, according to Bloomberg and other sources.

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

Both companies now supply Apple with wireless chips and patent licenses, and the deal would make Broadcom the world's third-largest chipmaker after Intel and Samsung. The proposed transaction would be valued at approximately $130 billion, including $25 billion of net debt.

"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".

Wall Street will be watching closely how the deal unfolds. We think NXP would also fit in reasonably well under the Broadcom umbrella, but we're surprised that Qualcomm's cash hoard isn't a requirement to fund Broadcom's bid. "Given the leverage required for the deal, there is potential Broadcom may spin-off or sell the [mobile chip] segment, which could lower the leverage required".

The move would combine two of the largest makers of wireless communications chips for mobile phones and could pose a significant competitive threat to Intel, which has been looking to diversify into smartphone technology. "It would value Qualcomm's equity at roughly $103bn".

Yes, Broadcom made this landmark bid to acquire one of it's top most rivalries i.e. Qualcomm Inc.

And a premium of 33 per cent on Qualcomm's "unaffected 30-day volume-weighted average price".

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