Broadcom proposes $130 billion deal to buy Qualcomm

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Shareholders of both companies seemed to approve however - the share price of Qualcomm and Broadcom rose as news of the bid emerged, Whether this feeling of optimism will persist in the face of takeover battle remains to be seen.

On Monday, Broadcom made an unsolicited offer to pay $70 per share to buy its rival. At $70 a share, an offer would value Qualcomm at $103 billion.

In a statement about its proposal, Broadcom president and CEO Hock Tan flagged "greater scale and broader product diversification" as key strategic drivers for the offer. We refer investors to our November 3 note, written after Bloomberg and The Wall Street Journal surfaced rumors about the potential bid, but in short, we see a sound strategic rationale for such a deal, and the financial component is especially attractive for Broadcom because we value Qualcomm at $68 per share on a stand-alone basis.

The bid comes as Broadcom plans to move its headquarters to the United States from Singapore.


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

Qualcomm has a (long) pending acquisition, of chipmaker NXP Semiconductors NV, in the works - and Broadcom notes that its offer is not dependent on whether or not Qualcomm manages to close with NXP on the now disclosed terms (it's offering ~$39BN for the Netherlands-based chipmaker which has a focus on car-related applications and also security-based identification). NXP is one of the largest makers of chips for vehicles and expanding into self-driving technology, and Broadcom also is open to acquiring NXP, according to one of the sources. The bid follows a series of deals in the components market. 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.

Broadcom said if the deal is approved, it expected a combined company to have revenues of about $51 billion.

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