Qualcomm says no to Broadcom's US$105 billion bid
It would have been the biggest acquisition in the technology industry, but it was not to be as Qualcomm's board of directors have unanimously rejected Broadcom's record-breaking US$105 billion offer to acquire the company.
Under the terms of the deal, shareholders of Qualcomm would get $60 in cash and $10 in Broadcom's stock for each share. This would have represented a 28% premium over the price of Qualcomm shares on 2nd November.
According to reports, the Board of Directors at Qualcomm believes that Broadcom's offering "dramatically undervalues" the company and that it also comes with "significant regulatory uncertainty."
Steve Mollenkopf, CEO of Qualcomm, said:
"No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry. We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G.”
This may be true, but only if Qualcomm manages to settle its legal dispute with Apple and if the company continues to maintain its position in the Android processor market.
On the bright side, Qualcomm is in the process of acquiring NXP Semiconductor, a leading supplier of electronics in automobiles. This acquisition will instantly make Qualcomm in leader in the automotive electronics industry.
It will be interesting to see now if Broadcom decides to increase their offer, and if they do, how would Qualcomm respond.