Qualcomm smacks down Broadcom takeover bid

Qualcomm smacks down Broadcom takeover bid

Qualcomm smacks down Broadcom takeover bid

Broadcom presented a US$130 bn offer for Qualcomm, its adversary chip producer.

U.S. semiconductor and telecommunications firm Qualcomm rejected a $103bn takeover bid from competitor Broadcom on Monday, saying the offer "dramatically" underestimated the value of the company. According to the company's official statement released today, Qualcomm's board of directors "unanimously rejects" the "unsolicited proposal" put on the table by Broadcom.

Meanwhile, Qualcomm is trying to acquire NXP for $38 billion but NXPs shareholders are reluctant. This company acquired Broadcom in the year 2015.

After this response from Qualcomm, we are yet to hear Broadcom's reaction.


The proposal "significantly undervalues Qualcomm relative to the company's leadership position in mobile technology and our future growth prospects", said Paul Jacobs, Qualcomm's executive chairman, in a statement. The combined company would be third-largest chipmaker behind Intel and Samsung. The deal has been delayed by the Committee on Foreign Investment in the United States, which investigates proposed acquisitions of USA companies by foreign buyers on national security and intellectual property grounds.

Qualcomm shares rose 0.8 percent, to $65.11, while Broadcom was off by 1 percent, at $262.24 a share, after the rejection announcement.

The bid takes advantage of Qualcomm's weakened position after a year marred by conflicts with Apple Inc. over its patent royalty fees and global regulators alleging anticompetitive business practices. Qualcomm does not plan to considerably increase its price for NXP as a defensive strategy to make its acquisition by Broadcom more costly, one of the sourced said. Qualcomm's profit in the fiscal year ended September 24 plummeted 57%, and its share price sank about 18% in the 12 months leading up to the bid.

San Diego-based Qualcomm said the bid undervalues the company's position in thriving areas in the semiconductor industry like mobile, "internet of things", automotive, edge computing and. They have forced Qualcomm to offer concessions, and may demand more.

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