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Broadcom Wants to Buy Qualcomm

By William Vogeler, Esq. on November 08, 2017 | Last updated on March 21, 2019

Will Qualcomm accept Broadcom's offer to buy the mobile-phone chipmaker?

According to reports, the offer was a 28 percent premium over the stock's closing price. In a transaction valued at $130 billion, it seems like an offer Qualcomm can't refuse.

Of course, things change everyday -- especially in technology. But if the deal goes through, it would be the largest acquisition in tech history.

Broadcom

Broadcom is on an ambitious campaign to become the world's third largest chipmaker, reports Ars Technica. Intel and Samsung dominate the market for now.

By acquiring Qualcomm, however, Broadcom would become the leader in providing components needed to build more than one billion smartphones sold each year. The deal would be twice as big as the last major acquisition in tech.

"The combination of the two companies could generate strong synergies and create a dominant wireless business and overall powerful global semiconductor leader," analyst Mike Walkley said.

However, it is far from a done deal. Qualcomm reportedly will recommend shareholders reject the offer.

Qualcomm

According to analysts, Broadcom is making a play when Qualcomm is at a weak point. Qualcomm is dealing with regulatory actions and a lawsuit from Apple that could result in a "major blow" to the company's bottom line, Bloomberg reported.

"The ball is now in Qualcomm's court, with management now under pressure to convince shareholders why current management will be better at driving value than Broadcom," analyst Stacy Rasgon said.

Rasgon said there will be "considerable amount of back and forth."

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