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

Anita Tucker
November 4, 2017

The biggest ever takeover of a chipmaker could be brewing.

A deal of this kind aligns with the current industry trend of consolidation, but also keep in mind that Broadcom is the largest maker of Wi-Fi chips in the world, while Qualcomm is the largest maker of modems.

According to that report, the potential bid appears to be in the early stages, with no final decision made yet, but is likely to be made in coming days.

Qualcomm shares jumped more than 12 percent, to $61.55 in late trading following a Bloomberg story, which cited unnamed sources familiar with the deal. Broadcom's stock also rose on the report, adding $14.13 or 5.45% to $273.63.

Qualcomm shares rose as much as 13 per cent in NY in their biggest intraday move since 2008, valuing the company at $92-billion. Broadcom, created in 2016 when Avago Technologies Ltd. acquired Broadcom Corp. for $37 billion, has built itself from a former Hewlett Packard division into one of the largest chipmakers via a string of purchases.

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Broadcom, which has a market value of $110 billion, just announced on Thursday that it's moving its headquarters to the United States from Singapore. As a result, there is talk that the 2018 iPhone and iPad models will feature modem chips made by Intel and MediaTek.

Broadcom, a major supplier of iPhone parts that counts Apple among its largest customers, said this week it will return its headquarters to the USA from Singapore. For one, Qualcomm is in the midst of a legal dispute with Apple, with the dispute having started in January when Apple sued Qualcomm for $1 billion.

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.

At issue between Qualcomm and Apple are licensing fees the chipmaker charges for patents that cover the basics of how mobile phone systems work. The two companies are already among the top 10 providers of chips in an industry that's consolidating rapidly.

Other reports by My Hot News

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