Qualcomm up after rumor of Broadcom interest

Alan Olson
November 4, 2017

According to Bloomberg news, if the deal goes through then Broadcom might acquire Qualcomm for the price of $100 billion, which would value the latter's shares at $70.

A Qualcomm spokeswoman declined to comment. Qualcomm's shares shot up almost 13 percent in midday trading today after the report, for a valuation of about $92 billion. Broadcom's stock also rose on the report, adding $14.13 or 5.45% to $273.63.

Broadcom Chief Executive Officer Hock Tan is a voracious acquirer, and he's played a key role in a wave of consolidation engulfing the $300 billion semiconductor industry over the last three years.

Broadcom, based in Irvine, was acquired in 2016 by Avago Technologies, a Singapore based semiconductor outfit that has been growing through acquisitions - including LSI Corp., PLX Technology, Emulex and others. Tan has said he wants more deals, a strategy that could be limited by opposition from US regulators.

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Apple currently uses both Intel and Qualcomm modem components, but the iPhone maker is now in a dragged-out legal fight over Qualcomm patents and the fees demanded to license the technology of those patents.

Broadcom, which has a market value of $110 billion, just announced on Thursday that it's moving its headquarters to the United States from Singapore. The Wall Street Journal quickly confirmed the news in its own report. No concrete decisions on the matter have yet been reached and it's now unclear what conditions would the semiconductor company be prepared to offer to Qualcomm and what level of a bid would the San Diego, California-based tech giant be prepared to consider. Broadcom also supplies is a major supplier of parts for Apple's iPhone, and new management might be better positioned to resolve the dispute, Bloomberg noted.

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