Published: Tue, November 07, 2017
IT | By Jonathon Greene

Chipmaker Broadcom bids $130bn for rival Qualcomm

Chipmaker Broadcom bids $130bn for rival Qualcomm

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. Qualcomm's recent $38.5bn takeover of NXP Semiconductors is also a factor that the company believes Broadcom has not accounted for in terms of that amount it is offering.

In a move that could lead to the biggest tech takeover ever, Broadcom has bid $130 billion to buy rival firm Qualcomm. As of Monday, shares of Qualcomm are still about 8% lower than the $70 per share offer price. At $70 a share, an offer would value Qualcomm at $103 billion.

Reuters reported that Broadcom had not contacted Qualcomm about the offer prior to Tan's letter.

The bid comes as Broadcom plans to move its headquarters to the United States from Singapore. Today's Broadcom is the product of a $37 billion combination in 2016 between Avago, a Singapore-based company that was once part of a former unit of pioneering PC maker Hewlett-Packard, and Broadcom, another company with origins in Southern California which made chips for tablets, smartphones and other telecom and cable applications.

Shares of Broadcom have rallied this year while Qualcomm has fallen, making the target more vulnerable.

Qualcomm's share price rose as much as 14 per cent when the news broke.

Qualcomm is now trying to close its pending $38-billion acquisition of NXP Semiconductors, a leading supplier of chips for vehicles that is also expanding into self-driving technology, and it is believed that Broadcom is open to acquiring NXP. The statement said that there would be no further comment from the company until the assessment was completed. 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.

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