Broadcom bids US$103b for Qualcomm, open to going hostile

07 November, 2017, 01:38 | Author: Lora Ball
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Qualcomm and Broadcom have patent portfolios in wireless communications that are largely adjacent to each other, and antitrust concerns over any proposed deal could be muted because the companies have few areas of overlap beyond Wi-Fi solutions for wireless routers, Bluetooth drivers and some RF semiconductors.

The offer came after Broadcom chief executive Hock Tan appeared with President Donald Trump last week and announced the company is likely to relocate its headquarters from Singapore to the US.

Qualcomm said it would review the proposal but the San Diego-based company is inclined to reject the bid as too low and fraught with risk that regulators may reject it or take too long to approve it, people familiar with the matter told Reuters. Chip maker Broadcom Ltd made an unsolicited US$103 billion (RM436 billion) bid for Qualcomm Inc yesterday, setting the stage for a takeover battle that could reshape the industry at the heart of mobile phone hardware. The proposed transaction is valued at approximately $130 billion on a pro forma basis, including $25 billion of net debt, giving effect to Qualcomm's pending acquisition of NXP on its now disclosed terms. According to CNBC, Broadcom brought the offer to Qualcomm privately more than a year ago but was rebuffed.

It was not clear who Broadcom was referring to, but Apple is Qualcomm's biggest customer. There has been regulatory scrutiny for that deal in Europe, as well as reported objections from NXP stakeholders.

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"We would not make this offer if we were not confident that our common global customers would embrace the proposed combination", Mr Tan said.

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.

Broadcom said its proposal stands irrespective of whether Qualcomm's acquisition of NXP goes through or not.

Broadcom has been trying to get regulatory approval for its purchase of Brocade Communications Systems Inc since 2016.

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