Broadcom Offers to Buy Mobile Chipmaker Qualcomm for US$ 103 Billion
On November 6, 2017, Broadcom offered around US$ 103 billion to buy a mobile chipmaker Qualcomm, a biggest tech deal ever signed
Broadcom — a semiconductor company that manufacture products for the wireless and broadband communication industry, owing around US$ 100 billion based in Singapore and the U.S., said on November 6, 2017 that it has offered around US$ 70 per share or US$ 103 billion in cash and stock to buy Qualcomm, a semiconductor and telecommunications equipment company that designs and markets wireless telecommunications products and services.
The deal between the two largest manufacturers of wireless communications chips for mobile phones would raise the stakes for Intel Corp, which is diversifying into smartphone technology from its stronghold in computers.
Broadcom offers 27.6% to Qualcomm’s closing price of $54.84 on November 2, 2017, a day before media reports of a prospective deal fueled the company’s shares. Qualcomm shareholders would get $60 in cash and $10 per share in Broadcom shares, if the deal would be executed successfully. Broadcom’s offer values the transaction at $130 billion, including debt.
Broadcom would further encourage Qualcomm to complete its NXP acquisition, as it has various distribution channels, exposure, and scale to the fastest growing segments in automotive.
Hock Tan, CEO of Broadcom, said that he would not rule out a proxy fight to convince shareholders to replace the board and accept the offer. He further added, “We are well advised and know what our options are, and we have not eliminated any of those options,” He said, “We have a very strong desire to work with Qualcomm to reach a mutually beneficial deal.”
Qualcomm would close its US$ 38 billion acquisition of NXP Semiconductors, one of the largest makers of chips for vehicles and expanding into self-driving technology. Qualcomm said, “It would assess the proposal in order to pursue the course of action that is in the best interests of Qualcomm shareholders.”
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