Broadcom, a leading semiconductor device supplier to the wired, wireless, enterprise storage, and industrial end markets offered Qulacomm Inc. more than $100 billion to buy all the shares of the company. If Qualcomm agrees to the proposal, it would become the largest technology takeover ever.
Broadcom has proposed an offer of $70 a share in cash and stock( $60.00 in cash and $10.00 per share in Broadcom shares) for Qualcomm, the mobile phone chipmaker company popularly known for making Snapdragon line of SoCs. It represents a premium of 28% to the closing price of Qualcomm common stock on November 2, 2017. The proposed transaction is valued at approximately $130 billion on a pro forma basis, including $25 billion of net debt.
If Broadcom buys Qualcomm, it would become the world’s third largest semiconductor giant after Intel Corp. and Samsung. Their combined set of components would become default components in more than a billion phones sold every year.
There’s a current pending acquisition of NXP Semiconductors on disclosed terms of $110 per share by Qualcomm. Broadcom made it clear that their proposal doesn’t get affected if Qualcomm’s acquires NXP or not. NXP is the leading semiconductor supplier for automotive and digital networking industries. Broadcom and Qualcomm, including NXP, will have pro forma fiscal 2017 revenues of approximately $51 billion and EBITDA of approximately $23 billion, including synergies.
The Broadcom’s acquisition proposal to Qualcomm came a few days after the news of Apple planning to remove Qualcomm from supplying its hardware products due to Qualcomm’s monopolistic practices to prevent Apple from sourcing key components from its competitors and withholding software critical to testing. Few reports mentioned that Apple might be shifting its dependency from Qualcomm to other companies such as Intel and MediaTek.
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