A mega-deal is about to go down in the chip manufacturing industry. Broadcom, well known for its Wi-Fi and Bluetooth chips in particular, is about to take over Snapdragon manufacturer Qualcomm. But Qualcomm is prepared to fight for a better deal.
The takeover bid is expected to be the most expensive in the history of the chip industry. Broadcom is offering over $ 100 billion for the acquisition of Qualcomm. It is planned to pay $ 70 per share. The stock market is responding positively to rumors that both Broadcom’s (plus 5.5%) and Qualcomm’s (plus 13%) share price are jumping up in light of the reports.
Meanwhile, Qualcomm is resisting the offer and sees itself as being significantly undervalued at a price of $ 100 billion. Therefore, the Supervisory Board will probably recommend that its shareholders do not accept the tender offer, also because of possible difficulties with the antitrust authorities. As of yet, there is no official statement forthcoming.
The main prize: Qualcomm’s Snapdragon chipset / © Qualcomm
The dragon snaps up the small fry
Curiously, Qualcomm is currently busy buying up another chip manufacturer, NXP Semiconductors. Broadcom has just acquired Brocade for $ 5.5 billion – and last year it was itself bought by Avago, which paid $ 37 billion for it. Following the Avago deal, the entire company, which is now headquartered in Singapore, has been renamed Broadcom.
The consolidation of all these different manufacturers may not be good for consumers.
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The deal is not yet dry, and the Singapore headquarters would require special approval for the acquisition of Qualcomm, a US company, by the local authorities. Together with NXP, the resulting conglomerate would be the world’s third largest chip manufacturer and would dominate the mobile sector in particular.