Report: Qualcomm to receive unsolicited takeover bid from Broadcom as soon as this weekend

Report: Qualcomm to receive unsolicited takeover bid from Broadcom as soon as this weekend
According to a report in the WSJ, Qualcomm, currently embroiled in a number of lawsuits with Apple, is apparently about to receive an unsolicited takeover bid from semiconductor designer Broadcom. The deal could be announced as soon as this weekend and is expected to be made up of 80% to 90% cash, with the remainder in stock. Qualcomm's shares soared 12.71% on the rumor, or $6.97, to $61.81. Broadcom's stock also rose on the report, adding $14.13 or 5.45% to $273.63.

Qualcomm is known for its Snapdragon chipsets used to power many smartphones. The company's modem chips have been used by Android manufacturers and by Apple since the very first iPhone. But last year, Apple limited the use of Qualcomm's modems to CDMA versions of the Apple iPhone 7 and Apple iPhone 7 Plus, while Intel supplied the chips for the GSM variant. Even though Qualcomm's component is considered to be the best, Apple is trying to get back at the company for various patent and legal issues. As a result, there is talk that the 2018 iPhone and iPad models will feature modem chips made by Intel and MediaTek.

While Qualcomm has been accused by Apple and some other manufacturers of not licensing its standard essential patents in a fair, and non-discriminatory manner, the company has been on the offensive. Yesterday it filed a suit against Apple in a California district court claiming that Apple breached its contract with Qualcomm by trying to pass information about Qualcomm's modem chip to other Apple employees who were working with Intel's component.

Broadcom announced yesterday its intention to move corporate headquarters back to the U.S. to take advantage of the lower tax rates expected. Both Broadcom and Qualcomm have pending deals that could be affected by a merger. Qualcomm is looking to complete a $40 billion acquisition of NXP Semiconductors, while Broadcom has a $5.5 billion offer for Brocade Communications that it is waiting to complete.

source: WSJ

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8 Comments

1. iczer

Posts: 157; Member since: Oct 14, 2015

Broadcom is considering a bid of more than $100 billion for Qualcomm!! Wow!!

2. sgodsell

Posts: 7174; Member since: Mar 16, 2013

I like Broadcom's Raspberry Pi SoCs. However everything else they do is too proprietor for Linux, and they like to keep things closed. They are far from the open source community.

3. fyah_king unregistered

Sold!!!

4. medicci37

Posts: 1361; Member since: Nov 19, 2011

I didn't know Broadcom had that kind of money.

5. Dr.Phil

Posts: 2340; Member since: Feb 14, 2011

They don't. It would have to be financed in some way, however the resulting company would get around $30 billion a year in revenue. So it would be easy to pay back any loans that are given to help make this deal happen. Not to mention that I'm sure once this deal closes, Broadcom will settle with Apple and I'm sure other cases being made against Qualcomm may be dropped due to new leadership taking over. Unfortunately, Qualcomm set itself up to be in this predicament because of their constant legal battles. It's taking such a toll on them that a takeover would happen at some point.

6. sgodsell

Posts: 7174; Member since: Mar 16, 2013

Let's get one thing straight. Apple is going to have to pay billions to Qualcomm. I would bet billion on that, especially when Apple is holding back all payments. So Apple is definitely going to pay. The question is exactly how much are they going to pay.

7. Nopers unregistered

They’re not holding back all payments they’re holding back royalties that they believe to be unjust.

8. mikehunta727 unregistered

If the IP sharing with Intel is true also than I think it's a few billion dollar decision that Apple behind the scenes would like to do, I am sure they will fight the fees to reduce as much as possible tooth and nail too. Apple sharing Qualcomm modem IP with Intel(not confirmed but lets see), Apple dumps Qualcomm entirely and goes with Intel on reduced prices on condition that Apple shares this information with Intel, has now QC IP inside of the chips, over the years Apple could easily make their money back , whatever they end up paying QC, by doing this shady/grimey ass move and tactic, Intel will become a major modem market player with infused QC IP QC accusing Apple of sharing their IP is a extremely serious allegation, lets see how it unfolds

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