Broadcom is mulling $100B bid to buy chip giant Qualcomm

Broadcom is mulling $100B bid to buy chip giant Qualcomm

Broadcom is mulling $100B bid to buy chip giant Qualcomm

The news, reported by Bloomberg today, would value Qualcomm shares at around $70, and investors immediately responded enthusiastically by sending Qualcomm stock up almost 14 percent in what Bloomberg says is the largest stock movement for the company in almost a decade.

The value of Broadcom's bid has not been decided, though an offer in the range of around $70 to $80 per share is being contemplated, one of the sources said.

The stock of San Diego-based Qualcomm shot up 12% to $61.65 a share in midday trading Friday after reports surfaced that Broadcom was considering making an unsolicited offer. Evil shriek in happiness, chipmaker Broadcom is reportedly considering buying fellow chipmaker Qualcomm for $100 billion with a capital B.

Broadcom, based in Irvine, was acquired in 2016 by Avago Technologies, a Singapore based semiconductor outfit that has been growing through acquisitions - including LSI Corp., PLX Technology, Emulex and others. Qualcomm's shares shot up almost 13 percent in midday trading today after the report, for a valuation of about $92 billion.

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Qualcomm faces a multinational legal battle with Apple Inc over Qualcomm's licensing terms to Apple.

Like Qualcomm, Broadcom is a major supplier of parts for Apple products. Since then, though, smartphone sales growth has slowed and Intel has succeeded in placing its modems in some iPhone models. Earlier this week, Qualcomm executives said the legal process would "proceed under the court's schedule", indicating no resolution soon. Apple contends Qualcomm is unfairly charging too much and illegally taking advantage of its market position in chips.

It's also unclear what such a deal would mean for Qualcomm's current bid of almost $40 billion to purchase NXP Semiconductors, a deal that's facing stiff regulatory reviews in Europe and opposition from some investors who contend the bid undervalues NXP.

Aside from the financial challenges of such a large deal, Broadcom may also encounter close regulatory scrutiny. The two companies are already among the top 10 providers of chips in an industry that's consolidating rapidly.

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