09 Nov'17

Could this be the largest tech deal of all time?


Broadcom, a manufacturer and supplier of compartments for technology products, have offered to purchase its competitor Qualcomm.


In their public statement, Broadcom state that they have proposed $70 ($60 in cash and $10 in Broadcom shares) per share to purchase Qualcomm. This offer is valued at $130 billion.


This figure ‘represents a 28% premium over the closing price of Qualcomm common stock on November 2, 2017’- the last unaffected trading day prior the media speculation over a potential transaction.


Broadcom believe that their proposal ‘is compelling for stockholders and stakeholders in both companies.’ They add, ‘This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products.’


Broadcom’s offer comes in the midst of a legal dispute between Apple and Qualcomm over licensing to Apple.  Reuters reports that the legal battle was triggered by a ‘change in supply arrangements under which Qualcomm has stopped providing some software for Apple to test its chips in its iPhone designs’. It appears that Broadcom strategically placed their offer at a time when Qualcomm are experiencing uncertainty.


While Qualcomm have confirmed that they have received Broadcom’s offer, they denied to give TechCrunch any further comments.


In their press release, Qualcomm states that they ‘will assess the proposal in order to pursue the course of action that is in the best interests of Qualcomm shareholders.’


Business Insider summaries that if this deal were to go ahead then it ‘would be the largest-ever takeover in tech.’ Forbes states that ‘While this deal is complex and unlikely to happen, it is not impossible’.