Communications chipmaker Broadcom Ltd on Monday said it offered to buy smartphone chip supplier Qualcomm Inc for $70 per share or $103 billion in cash and stock, in what would be the biggest technology acquisition ever.
Broadcom is up 2.31% to $279.95 and Qualcomm is up 4.57% to $64.63. Qualcomm apparently isn't happy with the offer, with Bloomberg saying that Qualcomm thinks the deal "undervalues the company".
Hock Tan, president and CEO of Broadcom, said in a statement: "This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products". Under Broadcom's proposal, Qualcomm shareholders would receive $70 per share - $60 in cash and $10 in shares of its rival.
The bid comes as Broadcom plans to move its headquarters to the United States from Singapore.
Broadcom released details of its proposed takeover of Qualcomm on Monday, and shares of both companies are rising on the news.
Qualcomm has a (long) pending acquisition, of chipmaker NXP Semiconductors NV, in the works - and Broadcom notes that its offer is not dependent on whether or not Qualcomm manages to close with NXP on the now disclosed terms (it's offering ~$39BN for the Netherlands-based chipmaker which has a focus on car-related applications and also security-based identification). The forward price-to-earnings ratio for Broadcom recently stood at 14.6, slightly above its 13.5 average.
Antitrust concerns over a Broadcom-Qualcomm deal also may be muted because the companies have few areas of overlap beyond Wi-Fi solutions for wireless routers, Bluetooth drivers and some RF semiconductors, said Rob Lineback, a research analyst at IC Insights.