Chipmaker Broadcom plans unsolicited bid for Qualcomm

Broadcom Plans Unsolicited Bid for Qualcomm

According to a report in the WSJ, Qualcomm, now embroiled in a number of lawsuits with Apple, is apparently about to receive an unsolicited takeover bid from semiconductor designer Broadcom.

Broadcom representatives are reportedly speaking with advisers regarding a potential deal.

Share value in Qualcomm is up almost 14 percent on the news. Broadcom added 5.5 percent to $273.63.

For Broadcom and Qualcomm, the $100 billion bid would make a good deal of sense.

Shares of Broadcom have rallied this year while Qualcomm has fallen, making the target more vulnerable. Broadcom itself was reborn in 2016 when Avago Technologies Ltd. acquired Broadcom Corp. for $37 billion.

Broadcom Chief Executive Officer Hock Tan is a voracious acquirer, and he's played a key role in a wave of consolidation engulfing the $300 billion semiconductor industry over the last three years. Since then, though, smartphone sales growth has slowed and Intel has succeeded in placing its modems in some iPhone models. Broadcom announced yesterday its intention to move corporate headquarters back to the U.S.to take advantage of the lower tax rates expected. For one, Qualcomm is in the midst of a legal dispute with Apple, with the dispute having started in January when Apple sued Qualcomm for $1 billion.

The proposal raises questions about whether Qualcomm will close its pending $38-billion acquisition of NXP Semiconductors NV.

Qualcomm faces a multinational legal battle with Apple Inc over Qualcomm's licensing terms to Apple. The chipmaker countersued the Cupertino-based company in April, sought injunctions to halt iPhone sales in the United States and China, and filed a lawsuit over copyright infringement.

That would give it control of a big part of the supply chain of vital phone components such as wi-fi and cellular modem chips.

A tie-up between the two chipmakers would be the latest in the semiconductor industry that has been rapidly consolidating as companies try to capture a big share of the fast-growing market for connected devices and connected cars.

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