Broadcom plans Qualcomm bid according to sources

Broadcom plans Qualcomm bid according to sources

Broadcom plans Qualcomm bid according to sources

First reported by Bloomberg, Broadcom is said to be readying an assault on publicly listed Qualcomm and planning to offer shareholders $70 a share.

Qualcomm's chips and patents affect nearly every smartphone model in the world, and Broadcom is offering $70 a share, which is a 28pc premium on Qualcomm's closing stock price last Thursday (2 November) according to a report in The New York Times.

Hock Tan, president and CEO of Broadcom, said in a statement: "This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products".

Broadcom today (6 November) revealed a $105bn takeover bid for Qualcomm, a move that would see the creation of a giant in the chip-making world.

- Communications chipmaker Broadcom Ltd (AVGO.O) is planning to unveil a bid for smartphone chip supplier Qualcomm Inc (QCOM.O) by Monday, three sources familiar with the matter said on Friday, an attempt to create a roughly $200-billion company through the biggest technology acquisition ever.

Still, analysts expect Qualcomm management to reject the $70-per-share price Broadcom is offering as too low.

Broadcom released details of its proposed takeover of Qualcomm on Monday, and shares of both companies are rising on the news.

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. The forward price-to-earnings ratio for Broadcom recently stood at 14.6, slightly above its 13.5 average.

The proposed deal comes at a time when there has been significant consolidation within the chipset market, driven by greater demand for smartphones and connected devices. Publicly, Qualcomm has only said it is "evaluating" the deal. Broadcom primarily focusses on Wi-Fi and Bluetooth chips.

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