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Broadcom offers $103 billion for Qualcomm, sets up takeover battle

07 November 2017

Reports suggest that Broadcom would not go over Qualcomm's offer of $110 per share to acquire NXP, so it may add urgency to NXP investors to close the deal after all.

But President Donald Trump appeared with Broadcom's chief Mr Tan last week, saying the company will relocate its legal base to the United States - a move which is expected to free Brocade's bid from the CFI review.

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.

Broadcom says the offer represents a 28 per cent premium over the closing price of Qualcomm common stock on November 2, 2017 - aka "the last unaffected trading day prior to media speculation regarding a potential transaction".

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

The resulting tech company would control key components needed to make smartphones and is likely to face scrutiny from regulators. Including debt, the transaction is worth US$130 billion.

Qualcomm said in its own statement that the bid will now be assessed by its board. 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 more vulnerable to a takeover now because its shares have been held down by a patent dispute with Apple, as well as concerns it may have to raise its own $38 billion bid for NXP Semiconductors NV that it made past year.

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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 U.S. assets.

It is said that if Broadcom merges with Qualcomm, combination of Broadcom with Qualcomm will make Broadcom third largest Chip makers in the world.

Broadcom's own $5.5 billion (£4.2 billion) agreement to merge with US network provider Brocade Communications Systems a year ago has been delayed while it is scrutinised by the US Committee on Foreign Investment (CFI), which investigates proposed acquisitions of US companies by foreign buyers on national security and intellectual property grounds.

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Broadcom offers $103 billion for Qualcomm, sets up takeover battle