Sci-tech

Qualcomm rejects $103bn takeover bid from rival Broadcom

Qualcomm rejects $103bn takeover bid from rival Broadcom

Tom Horton, the company's Presiding Director of Qualcomm, Inc., also said that the uncertainty of the proposed acquisition also had something to do with the rejection.

US chipmaker Qualcomm Inc (QCOM.O) is making preparations to reject rival Broadcom Ltd's (AVGO.O) $103 billion bid as early as this week, four people familiar with the matter said on Sunday, setting the stage for one of the biggest-ever takeover battles.

A purchase of Qualcomm would make Broadcom the third-largest chip-maker, behind Intel Corp. and Samsung Electronics Co., Bloomberg reported.

Qualcomm said that, after a comprehensive review of the offer, its board unanimously concluded that the $70-a-share proposition "significantly undervalues" the chipmaker giant. At the time, Broadcom said that it was prepared to offer as much as $130 billion dollars to take control of Qualcomm. It was also exploring the possibility of putting the decision in the shareholders' hands by nominating individuals to Qualcomm's board who would engage with negotiation talks. Broadcom CEO Hock Tan, famed for his M&A expertise in the chip industry, said Qualcomm shareholders told him that they were interested in the deal.

ZDNet has reached out to Broadcom and will update if we hear more.

But any deal would need to pass muster with Qualcomm shareholders and could face regulatory scrutiny in the United States and other markets.

The sources asked not to be identified because the deliberations are confidential.

Both semiconductor companies did not immediately respond to requests for comment.

Qualcomm's Snapdragon mobile processors are widely used in the smartphones around the world.

This is just not how these big acquisitions work, usually, these companies sit together, work for a while and try to negotiate important details and then go to the public. Broadcom has indicated it is willing to buy Qualcomm irrespective of whether it closes the NXP deal. Amid all the fighting with Apple, and accompanying loss of revenue, Qualcomm's shares had fallen 20% this year through late October to $51 before rumors of Broadcom's interest leaked.


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