Broadcom Lowers Qualcomm Offer To $117bn

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Broadcom shaves 4 percent off its ‘opportunistic’ offer for Qualcomm, after objecting to raised bid for NXP

Mobile chipmaker Broadcom has lowered its takeover offer for Qualcomm, after it objected to the San Diego, California-based firm raising its purchase offer for NXP Semiconductors.

Broadcom had made an unsolicited offer of $130 billion (£99bn) in November 2017 to acquire Qualcomm, but it has now lowered its takeover offer by 4 percent to $117bn (£84bn).

The reduced offer comes after Qualcomm raised its own bid for Dutch chip maker NXP Semiconductors NV to $44bn (£31.7bn).

Cheeky Move?

Broadcom has objected to that move, and as a consequence lowered what some are calling its ‘opportunistic’ offer for Qualcomm down to $117bn.

Qualcomm has made no secret of its distaste of Broadcom’s unsolicited approach, and immediately hit back, saying that Broadcom had made “an inadequate offer even worse.”

“Broadcom’s reduced proposal has made an inadequate offer even worse despite the clear increase in value to Qualcomm stockholders from providing certainty around the NXP acquisition,” it said. “Broadcom has refused and continues to refuse to engage with Qualcomm on price.”

Whatever happens next, all eyes will be on a Qualcomm shareholder meeting on 6 March, where a new board is set to be elected.

Qualcomm shareholders can use this to decide whether to hand control of Qualcomm to six nominees put forward by Broadcom.

Legal Woes

Qualcomm of course is the firm behind the Snapdragon processors, and its ARM-based processors powers the majority of high-end smartphones.

But Qualcomm is also a firm currently mired in legal fights all over the world.

It is currently being investigated by the US Federal Trade Commission on possible antitrust charges, and is facing a similar investigation in Taiwan.

Qualcomm has already been fined $902 million (£736m) in South Korea for alleged monopolistic practices, and in 2015 the firm agreed to pay agreed to pay $975m (£703m) to settle antitrust charges in China.

The European Union last month fined Qualcomm 997m euros (£882m) for abusing its dominant market position.

And Qualcomm is also being sued by one of its biggest customers.

In 2017 Apple, backed by other tech firms, launched a $1bn lawsuit against Qualcomm for allegedly overcharging for its processors.

All of these legal tangles saw Qualcomm’s share price drop by 20 percent in 2017.

Into this stepped Broadcom with its unsolicited offer in November last year.

It is worth noting that if that Broadcom acquisition of Qualcomm did go ahead, it would be the biggest tech merger to date and one of the largest acquisitions in history. Indeed, the proposed deal is twice as large as the $65 billion EMC takeover by Dell in 2016.

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Author: Tom Jowitt
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