Published: Sat, November 04, 2017
Science | By Cecil Little

Qualcomm shares surge 13% on talk of $100 billion takeover by Broadcom

Qualcomm shares surge 13% on talk of $100 billion takeover by Broadcom

Prominent Apple supplier and component maker Broadcom is considering an acquisition of fellow chipmaker Qualcomm for more than $100 billion, in what would be the largest-ever acquisition in the chip business.

Update: Bloomberg's sources say Broadcom could offer Qualcomm about $70 per share in cash and stock within the next few days.

Broadcom, formerly based in Irvine before it was bought by Avago Technologies, is speaking to advisers about the potential deal. A final decision on whether to proceed has not been made, they said. Qualcomm's shares shot up almost 13 percent in midday trading today after the report, for a valuation of about $92 billion. Broadcom's plan to move its home address to the US from Singapore would free its $5.5 billion deal for USA network provider Brocade Communications Systems from a review by the Committee on Foreign Investment in the United States.

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Five years ago, when smartphone demand was soaring, Qualcomm briefly overtook Intel in market value.

Dow Jones reported Broadcom plans to make a bid for Qualcomm as early as this weekend. Broadcom, created in 2016 when Avago Technologies Ltd. acquired then-Broadcom Corp. for $37 billion, has built itself from a former division of Hewlett Packard into one of the industry's largest chipmakers via a string of purchases.

More: IPhone supplier Broadcom, seeking merger OK, unveils plan with Trump to return headquarters to U.S. Apple, in suing Qualcomm, thinks the company is nonetheless overcharging for use industry standard patents, which the law requires be licensed out on fair, reasonable, and non-discriminatory (or "FRAND") terms.

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Qualcomm, based in San Diego, is also confronting headwinds in closing its $47 billion purchase of NXP Semiconductors. Qualcomm's shares soared 12.71% on the rumor, or $6.97, to $61.81.

If it happens, it would be the largest takeover of a chip firm.

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