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tiptrot.com November 24, 2017


Broadcom offers to buy Qualcomm in $130 billion deal

07 November 2017, 12:15 | Deanna Wagner

Broadcom offers to buy Qualcomm in $130 billion deal

Chipmaker Broadcom seeks to acquire Qualcomm

The move would combine two of the largest makers of wireless communications chips for mobile phones and could pose a significant competitive threat to Intel, which has been looking to diversify into smartphone technology.

Qualcomm shareholders would get $60 in cash and $10 per share in Broadcom shares.

Qualcomm is preparing to fend off the unsolicited offer, arguing it undervalues the company, people familiar with the plans have said.

Broadcom said Monday that it was confident that "common global customers" would "embrace" the deal.


"It's a smart move that would make Broadcom into a tech juggernaut", said GBH Insights analyst Daniel Ives. We note that Broadcom's bid is independent of Qualcomm's success in closing its bid for NXP.

Broadcom president and CEO Hock Tan said the bid was "compelling for stockholders and stakeholders in both companies".

Broadcom Ltd., which has corporate headquarters are in San Jose, California but a home address in Singapore, is now taking steps that should make it easier to get deals done. 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.

One aspect that might be an issue is Qualcomm's efforts to close its $38-billion acquisition of NXP Semiconductors NV, which makes chips for vehicles with an eye to self-driving technology. According to reports people involved with Broadcom believe that it will not shy away from initiating a "proxy fight to gain seats on Qualcomm's board of directors in support of its offer". We think NXP would also fit in reasonably well under the Broadcom umbrella, but we're surprised that Qualcomm's cash hoard isn't a requirement to fund Broadcom's bid.



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