Is Broadcom Buying Qualcomm for $100 Billion?

According to a story on EE TimesBroadcom Ltd. is planning to make an offer to buy Qualcomm, the largest maker of mobile phone chips, for more than $100 billion. This acquisition would be the largest tech acquisition ever, in which Broadcom will try to buyout its arch rival Qualcomm.

Qualcomm StockAccording to a report by the Reuters news service, Broadcom is considering bidding $70 to $80 per share for Qualcomm, which would value the company at more than $103 billion. Qualcomm at this point is not aware of the bid, sources told Reuters. The Qualcomm Stock jumped 12% on Friday the 3rd of November.

Qualcomm itself is still in the process of trying to close a deal for European chip maker NXP Semiconductors, which is still in progress and is going be the largest acquisition in the semiconductor industry, till date.

According to Rob Lineback of market watcher IC Insights - Qualcomm, NXP and Broadcom combined could have total semiconductor sales of $40 billion, making it the third largest chip company ahead of TSMC but below Samsung and Intel. Such a deal would make 2017 the largest on record in semiconductor mergers with an estimated value of $120 billion including a reported merger proposal between Cavium and Marvell, he added.

When EEtimes asked analysts about this merger, they expressed some doubts about acquisition of Qualcomm by Broadcom.

"While it's feasible, it would not be possible at this time with the NXP deal under review," said Jim McGregor, principal analyst at Tirias Research. "I also have serious doubts about it, and it would face regulatory scrutiny."

Handel Jones, CEO of International Business Strategies Inc. (IBS), a Los Gatos, Calif.-based consulting firm, said NXP might be what Broadcom is most interested in. "There would be good synergy between Broadcom and NXP," he said.

Hock Tan, Broadcom's CEO, has been aggressive in pursuing major acquisitions, even of larger companies. Case in point: Broadcom Ltd. was formed by the 2016 acquisition of Broadcom Corp. by the smaller Avago Technologies for $37 billion. Tan was CEO of Avago and engineered the deal.

Broadcom also announced recently that it would relocate its main headquarters to the U.S. from Singapore, a move hailed by the Trump Administration as a testament to the power of a corporate tax reform proposal currently being pushed by Republican lawmakers.

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