Chipmaker Broadcom bids $130bn for rival Qualcomm

Dianna Christensen
November 7, 2017

On Nov. 6, Broadcom announced an unsolicited bid to acquire Qualcomm for $70 per share ($60 in cash and $10 in stock) in a deal valued at $130 billion, assuming that Qualcomm's ongoing bid to acquire NXP Semiconductors for $38 billion goes through.

It's not a done deal, however. The Broadcom proposal stands whether Qualcomm's pending acquisition of NXP Semiconductors N.V. ("NXP") is consummated on the now disclosed terms of $110 per NXP share or the transaction is terminated.

Qualcomm said in its own statement that the bid will now be assessed by its board.

Broadcom president and CEO Hock Tan said the bid was "compelling for stockholders and stakeholders in both companies". It has pulled off a string of purchases over a decade. In part this might be inspired by Qualcomm's pending release of the Centriq family of processors seeing as how Broadcom cancelled their ARM based server chip development earlier this year.

Including debt, the bid values the transaction at $130bn in total.

On Monday, Qualcomm's shares were up 3 percent at $63.71 in morning trading, suggesting that investors were skeptical a deal would happen. Broadcom primarily focusses on Wi-Fi and Bluetooth chips.

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Broadcom said BofA Merrill Lynch, Citi, Deutsche Bank, JP Morgan and Morgan Stanley have advised that they are confident that they will be able to arrange the necessary financing for the proposed transaction.

Broadcom is in the process of closing its $5.5bn acquisition of Brocade, while Qualcomm is struggling through regulatory scrutiny to complete its $38bn deal for Dutch semiconductor vendor NXP. Qualcomm recently agreed to buy NXP for a total of $47 billion in an all-cash deal.

Qualcomm said its board of directors is now reviewing the offer.

Industry analysts believe that if Apple does not challenge the deal, it's one hurdle that Broadcom will have cleared. "It would value Qualcomm's equity at roughly $103bn".

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 US assets.

Other reports by GlobalViralNews

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