Home / IT / Telecom / Tech/ Broadcom unveils $121 b ‘best and final’ offer for Qualcomm

Broadcom unveils $121 b ‘best and final’ offer for Qualcomm


Comments / {{hitsCtrl.values.hits}} Views / Wednesday, 7 February 2018 00:00


Reuters: Broadcom Ltd. made a $121 billion ‘best and final offer’ on Monday to acquire Qualcomm Inc, ratcheting up pressure on its US semiconductor peer to engage in talks on what would be the biggest ever technology acquisition. 

The takeover battle is at the heart of a race to consolidate the wireless technology equipment sector, as smartphone makers such as Apple Inc and Samsung Electronics Co Ltd use their market dominance to negotiate down chip prices.

Qualcomm responded that its board of directors would review the latest offer, and declined to comment further until then.

Broadcom’s new $82 per share offer included $60 in cash and $22 in Broadcom stock. Its first offer, of $70 per share, in November comprised $60 in cash and $10 in stock. The increased stock component would subject the deal to a Broadcom shareholder vote.

Reuters first reported on Broadcom’s new offer on Sunday.

Qualcomm shares fell 4.3% to $63.20 at mid-afternoon on doubts about the deal’s prospects, as well a KGI Securities report that said Apple might drop the chipmaker in favour of Intel Corp to supply modem chips for its next-generation iPhones.

Broadcom shares edged up 0.2% to $235.77.

Singapore-based Broadcom is mainly a manufacturer whose connectivity chips are used in products ranging from mobile phones to servers. Qualcomm primarily licenses its technology for the delivery of broadband and data, a business that would significantly benefit from the rollout of 5G wireless technology.

Qualcomm is locked in a patent dispute with Apple over its licensing agreements.

“Qualcomm got where it did in the last 30 years with a business model hinging on intellectual property licensing that is, at this day and age, not sustainable. You can sell products, as Broadcom does, very successfully, and generate a very good return for your shareholders,” Broadcom Chief Executive Hock Tan said in an interview.

In a presentation issued on its website, Broadcom criticised Qualcomm’s management team, led by its CEO Steve Mollenkopf, for its total shareholder returns of negative 7% since 2005, while the wider semiconductor index has returned 106%.

 


Share This Article


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Relevance of brand valuation?

Thursday, 22 November 2018

Another iconic global business leader has been exposed. Greed, both personal and corporate, it seems is the root cause. This mirrors the conduct of many political leaders around the world. Is it time to have much greater checks on CEOs, may be power-


JVP and minorities: Towards a third way

Thursday, 22 November 2018

As Sri Lanka moves toward a political show down between the UNP and SLFP/SLPP traditional political rivals, there is a third force with great potential strength emerging as a decider in any final outcome, provided that force remains united. By this


Reaching global quality standards through Deming Award

Wednesday, 21 November 2018

The importance of quality in the contemporary competitive business environment cannot be over-emphasised. Total Quality Management (TQM)is a company-wide, all pervasive management philosophy, which organisations globally, in many business sectors hav


Ramsar accreditation of Colombo Wetlands: Rebranding Colombo as a Wetland City

Wednesday, 21 November 2018

Colombo, once known to be “kolonthota,” has always been identified as a wetland complex at the heart of the Kelani river delta. Today this city is increasingly drying up, with around 20 sq km left as wetlands which continue to be threatened every


Columnists More