Leading U.S. chipmaker Broadcom has made an unsolicited offer of more than $100 billion (approx. £76 billion) for the purchase of rival Qualcomm.
The bid proposes a price of $70 per share, consisting of $60 in cash and $10 per share in Broadcom shares for Qualcomm stockholders. This price represents a significant 28% premium on the closing price of Qualcomm’s stock on November 2nd – after which point the price rose due to media speculation.
The offer is one third higher than Qualcomm’s average volume-weighted average stock price across the last month. The total mooted purchasing price would represent the largest ever tech acquisition, the current record-holder being Dell’s $67 billion acquisition of EMC in 2015.
The merger of the two companies would create the world’s third-largest chip manufacturer, after Intel and Samsung. Broadcom said in a statement that part of the deal would involve redomiciling Qualcomm, a Singapore-based corporation, to the States.
Broadcom president and CEO, Hock Tan, said: “This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products.
“We would not make this offer if we were not confident that our common global customers would embrace the proposed combination. With greater scale and broader product diversification, the combined company will be positioned to deliver more advanced semiconductor solutions for our global customers and drive enhanced stockholder value.”
Qualcomm has confirmed that it received the offer but has not made any indication of the likelihood of accepting it. In a statement, the company said that its board would continue to “execute on its strategy to position the company for the next phase of profitable growth by making focused investments to extend its leadership in mobile into new opportunities.”
The firm argues that it has ‘significant opportunities’ to pursue a profitable business strategy, including through the Internet of Things – crucial to which is the development of 5G. Qualcomm states that it was a leader in bringing about 3G and 4G technology, and that it also intends to be at the forefront of 5G.