Qualcomm gets record breaking $130 billion offer from Broadcom
If the deal is agreed to by stock holders and regulators, the combined company will be the world's third largest chip manufacturer after Intel and Samsung. Qualcomm, which is the midst of a number of lawsuits with Apple over patent royalties, has been accused of not attempting to license its standard essential patents using a fair, reasonable and non-discriminatory process. The firm is known for its Snapdragon chipsets, which power Android phones, and it also makes modem chips for Android and iOS flavored handsets. There is speculation that due to its feud with Apple, the latter is designing out Qualcomm modems for the 2018 iPhone models, and will go with Intel and MediaTek.
Acquiring Qualcomm helps cover gaps in Broadcom's product lineup related to chips for 4G and 5G networks. Filling a product gap might make it easier for Broadcom to sell the deal to the FCC and the DOJ, as regulatory approval is going to be required. The sheer size of the transaction will force Washington to look at it closely before giving Broadcom the approval it will need to close the acquisition. That level of scrutiny could take months, if not a year, to complete.