Chip maker Broadcom has announced an unsolicited bid to buy rival Qualcomm for $103bn as it looks to boost its presence in the wireless market, setting the stage for what could be one of the biggest takeover battles.
Qualcomm said it would review the proposal and act in the best interests of its shareholders. The company is inclined to reject the bid as too low and fraught with risk that regulators would reject it or take too long to approve it, reported Reuters.
A takeover would combine two of the largest makers of wireless communications chips for mobile phones and raise the stakes for Intel, which has been diversifying into smartphone technology from its stronghold in computers. Broadcom approached Qualcomm last year to discuss a potential deal, but it did not contact Qualcomm prior to unveiling its $70 per share offer today.
Qualcomm is more vulnerable to a takeover now because its shares have been held down by a legal dispute with Apple, as well as concerns it may have to raise its own $38bn bid for NXP Semiconductors NV that it made last year.
The bid is an ambitious move by Broadcom chief executive Hock Tan, who turned a small, scrappy chipmaker into a $100bn company that is based in Singapore and the United States. It has pulled off a string of purchases over a decade. Tan appeared at the White House last week with President Donald Trump, describing the United States as a great country for businesses.
Broadcom plans to move its headquarters solely to the United States, which would allow it to avoid review by the Committee on Foreign Investment in the United States, which oversees foreign ownership of US assets.
Qualcomm, an early pioneer in mobile phone chips, supplies modem chips to phone makers such as Apple , Samsung, and LG that help phones connect to wireless data networks. Broadcom is also a major supplier to many of the same companies for Wi-Fi chips.