Broadcom May Acquire Qualcomm In Biggest Chip Tie-Up Ever

Broadcom May Acquire Qualcomm In Biggest Chip Tie-Up Ever

Broadcom May Acquire Qualcomm In Biggest Chip Tie-Up Ever

Qualcomm, based in San Diego, could become a key domestic asset for the company, as Broadcom already has a California co-headquarters in San Jose. No concrete decisions on the matter have yet been reached and it's now unclear what conditions would the semiconductor company be prepared to offer to Qualcomm and what level of a bid would the San Diego, California-based tech giant be prepared to consider.

Communications chipmaker Broadcom Ltd is planning to unveil a bid for smartphone chip supplier Qualcomm Inc by Monday, two sources familiar with the matter said on Friday, an attempt to create a roughly $200-billion company in what would be the biggest technology acquisition ever.

The saga kicked off almost a year ago, in January 2017, when Apple first filed a lawsuit against Qualcomm for allegedly abusing its market position to extract more money from hardware manufacturers.

Qualcomm, an early pioneer in mobile phone chips, supplies so-called modem chips to phone makers such as Apple, Samsung and LG that help the phones connect to wireless data networks. At $70 a share, an offer would value Qualcomm at $103 billion.

More news: Facebook Shares Higher As Third-Quarter Results Crush Estimates

There would also be some synergy with the bid, since both companies make chips that connect devices to each other and to the Internet. Broadcom recently announced it would move its corporate headquarters from Singapore back to the United States, in a move championed by President Donald Trump. Bloomberg says it could be for more than $100 billion.

A Qualcomm representative declined comment. The company's modem chips have been used by Android manufacturers and by Apple since the very first iPhone. A legal battle with Apple is costing revenue and jeopardizing a business model that for years made Qualcomm one of the most successful chipmakers. It's entirely unclear what would happen to Qualcomm's legal fight with Apple if it does sell itself, but it's likely Broadcom would settle the dispute to avoid incurring more legal costs.

We'll be paying close attention in the next few days for a potential announcement, so stay tuned for additional updates.

Related news