Semiconductor firm Broadcom has bid to buy rival Qualcomm in a deal worth $130 billion, potentially one of the biggest tech mergers of all times in terms of value. Rumors of the acquisition started popping up yesterday, and the offer will likely kick off a pitched battle between the two companies and regulators around the world.
According to a report from Bloomberg, chipmaker Broadcom is launching an ambitious campaign to acquire Qualcomm, best known as the default System on a Chip (SoC) and cellular modem vendor in most smartphones.
Reuters reported that Broadcom had not contacted Qualcomm about the offer prior to Tan's letter.
Broadcom is offering a combination cash-and-stock deal of $70 per share.
Qualcomm is preparing to fend off the unsolicited offer, arguing it undervalues the company, people familiar with the plans have said.
"Broadcom's proposal is compelling for stockholders and stakeholders in both companies".
Broadcom also said that it's offer stands regardless of whether the NXP deal goes through or is terminated. The company has gone so far with its Apple fight that it recently filed a lawsuit seeking to ban sales of the iPhone in China. We will maintain our fair value estimates of $68 for narrow-moat Qualcomm and $203 for narrow-moat Broadcom, but we would probably raise our fair value estimate for Broadcom-perhaps as much as 25%-if a definitive deal were reached.
"We would not make this offer if we were not confident that our common global customers would embrace the proposed combination, and we do not anticipate any material antitrust or other regulatory issues that would extend the normal timetable for closing a transaction of this nature". The combined company, now called Broadcom, is creating new headquarters in San Jose, California - a move it recently announced with Donald Trump.