Broadcom goes after Qualcomm with massive $130B bid
The unsolicited offer would create a chip superpower if Qualcomm says yes. It'd also be the largest tech acquisition ever.
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Broadcom is making a big play for Qualcomm.
Broadcom really, really wants to hook up with Qualcomm.
The San Jose, California, company, which makes chips for everything from cable modems to set-top boxes and digital video recorders, on Monday launched an unsolicited bid for Qualcomm, the world's largest maker of chips and processors for phones, for $70 a share, or $130 billion.
If it goes through, the deal would be the biggest tech acquisition ever. AOL's acquisition of Time Warner in 2001 was valued at $103.5 billion, but resulted in a $98.7 billion write-down a year later.
Qualcomm shares rose 3.5 percent to $64 in premarket trading. Broadcom rose 1.6 percent to $278.05.
A combination of the two would create a chip giant supplying components to a wide array of electronic gadgets found in your home or pocket. The deal marks a surprising turnaround from nearly a decade ago, when the two companies were bitter rivals in the courtroom. At the time, both companies made cellular chips, and Qualcomm ultimately had to pay Broadcom $891 million to settle the dispute.
Broadcom eventually sold its cellular business and is looking to get back into the game in a big way with Qualcomm. San Diego-based Qualcomm makes processors that power nearly every flagship phone in the world and supplies the cellular radio to some iPhones. It's also locked in an intense legal battle with Apple over patent licensing.
Last week, Broadcom announced that its parent company would relocate to the US from Singapore.
The Qualcomm deal, Broadcom says, would make the combined company the leading diversified communications chip company and would create a larger scale company that would drive research and development into next-generation technology.
Factoring in debt, the deal would be valued at about $103 billion, according to The Wall Street Journal.
Qualcomm said in a statement that it has received the proposal and will assess the terms. It declined to comment further.
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