Broadcom explores deal to buy Qualcomm

Markets Insider

Broadcom is considering a bid of more than $100 billion for Qualcomm, according to people familiar with the matter, in what would be the biggest-ever takeover of a chipmaker.

Broadcom, formerly based in Irvine before it was bought by Avago Technologies, is speaking to advisers about the potential deal.

Bloomberg, which was the first to report the news, said Broadcom has yet to make a final decision on the move.

Shares of Qualcomm (Nasdaq: QCOM) were up about 14% to a $93 billion market cap following the announcement; Broadcom (Nasdaq: AVGO) was up about 5% to a $110 billion market cap.

Broadcom, which is based in Singapore but has announced plans to return to the United States, could offer roughly $70 a share in cash and stock "in the coming days", according to a Bloomberg report Friday. Qualcomm is looking to complete a $40 billion acquisition of NXP Semiconductors, while Broadcom has a $5.5 billion offer for Brocade Communications that it is waiting to complete.

A Qualcomm representative declined comment.

More: IPhone supplier Broadcom, seeking merger OK, unveils plan with Trump to return headquarters to U.S. Broadcom itself was reborn in 2016 when Avago Technologies Ltd. acquired Broadcom Corp. for $37 billion. Apple, in suing Qualcomm, thinks the company is nonetheless overcharging for use industry standard patents, which the law requires be licensed out on fair, reasonable, and non-discriminatory (or "FRAND") terms. Regulators are still reviewing Qualcomm's $38.1 billion proposed acquisition of NXP Semiconductors for $38.1 billion. Reports surfaced this week that Apple was considering eschewing Qualcomm chips entirely in its iPhones and iPads beginning next year in what would a major blow for the San Diego-based chipmaker. The two companies are already among the top 10 providers of chips in an industry that's consolidating rapidly.

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