Qualcomm Rejects Broadcom's Takeover Bid

14 November, 2017, 01:40 | Author: Carmen Reese
  • Steven Mollenkopf CEO of Qualcomm

Qualcomm's board of directors could meet as early as Sunday to review the unsolicited acquisition offer and decide on its strategy, the sources said. Under Broadcom's proposal, Qualcomm stockholders would receive per share and it will consist of $60.00 in cash and $10.00 per share in Broadcom shares.

Qualcomm Inc. rejected Broadcom Ltd.'s unsolicited $105 billion offer, setting up a potentially hostile showdown between two giants of the chip industry over what would be the biggest technology takeover ever. But, now Qualcomm officially rejects that offer of 103 Billion dollars.

Qualcomm's board concluded that "Broadcom's proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty", said Tom Horton, Qualcomm's presiding director, said in the company's statement.

In a statement released today, Qualcomm's board say the offer "significantly undervalues" the company. It said its dominance of the mobile processors market and future growth prospects mean it is unable to accept Broadcom's valuation.

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Qualcomm's Snapdragon mobile processors are widely used in the smartphones around the world. A combination with Broadcom would not have propelled it past industry leaders Intel and Samsung. The deal has been delayed by the Committee on Foreign Investment in the United States, which investigates proposed acquisitions of US companies by foreign buyers on national security and intellectual property grounds.

Qualcomm CEO Steve Mollenkopf added that the United States chip maker has a future in mobile, the Internet of Things (IoT), edge computing and networking within the semiconductor industry, and the firm has no doubt of future growth in these areas. Hence, Broadcom's bid for the company was a surprise when the news emerged few days back.

"We continue to believe our proposal represents the most attractive, value-enhancing alternative available to Qualcomm stockholders and we are encouraged by their reaction", the company said.

Broadcom's response suggests "the potential of a fully-hostile bid, complete with proxy fight, could be building, with the nomination deadline for Qualcomm's board fast approaching".

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