Broadcom offers to buy Qualcomm for $130 billion

Broadcom offers to buy Qualcomm for $130 billion

Broadcom made an offer of $70 a share in cash and stock for Qualcomm, a 28 percent premium for the world's largest maker of mobile phone chips as of the stock's closing price on November 2, before Bloomberg first reported talks of a deal.

Shares of San Diego-based Qualcomm rose more than 15 percent at one point during trading Friday after reports surfaced that Broadcom was considering making an unsolicited offer.

Shares of Qualcomm jumped 12.7 percent to $61.81, while Broadcom's stock climbed almost 6 percent to $273.63 on Friday afternoon. Broadcom rose 1.6 percent to $278.05. "We would not make this offer if we were not confident that our common global customers would embrace the proposed combination", said Broadcom CEO Hock Tan about the Qualcomm acquisition.

Broadcom's bid for Qualcomm - if it goes ahead - would be of record size for the semiconductor industry, and could create the third largest chip company, behind Samsung and Intel.

Broadcom could launch its bid for Qualcomm as soon as this weekend, the person said.

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Including debt the bid values the transaction at $130bn in total.

Broadcom really, really wants to hook up with Qualcomm.

This battle began when Apple sued Qualcomm for $1bn and halted royalty payments to the company over complaints that Qualcomm was "overcharging billions" for technologies that they had nothing to do with.

The move was largely symbolic: Broadcom already lists San Jose, California, as a corporate co-headquarters. The company had originally considered an attempt to buy Qualcomm prior to that company's deal to buy NXP more than one year ago, but upon getting no traction at that time, retreated.

Despite both chiefs' political maneuvering, a Broadcom-Qualcomm tie-up may face intense regulatory scrutiny. That will likely prove much easier said than done, however, considering Qualcomm will likely want a higher number, and antitrust regulators will nearly certainly take a negative view of the deal.

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