Broadcom Considering Unsolicited $105 Billion Bid to Acquire Qualcomm
Broadcom is deciding whether to proceed with the largest-ever attempted acquisition of a chipmaker:
Broadcom Ltd. is considering a bid of more than $100 billion for Qualcomm Inc., according to people familiar with the matter, in what would be the biggest-ever takeover of a chipmaker. Broadcom is speaking to advisers about the potential deal, said the people, who asked not to be identified because talks are private. The offer of about $70 a share would include cash and stock and is likely to be made in the coming days, the people said. A final decision on whether to proceed has not been made, they said.
[...] Qualcomm finds itself in a weakened state. A legal battle with Apple is costing revenue and jeopardizing a business model that for years made Qualcomm one of the most successful chipmakers. Before today, its shares had slumped 16 percent this year, compared with a 41 percent surge in the Philadelphia Semiconductor Index. A change of management at Qualcomm might help resolve the dispute with Apple more quickly, and thereby make Qualcomm's licensing and chip businesses more valuable, according to Sanford C. Bernstein & Co. analyst Stacy Rasgon. Earlier this week, Qualcomm executives said the legal process would "proceed under the court's schedule," indicating no resolution soon.
Qualcomm acquired NXP Semiconductors N.V. for $47 billion in 2016. Avago Technologies acquired Broadcom Corporation for $37 billion in 2015 and renamed itself to Broadcom Limited. Broadcom Limited recently announced that it would move its headquarters to the U.S. from Singapore.
Also at Reuters.
In a later article, Bloomberg reports:
In the new iPhone X, Qualcomm chips make it possible to connect with cellular networks, and Broadcom parts ensure the device can detect the cell signals while also enabling new wireless charging features. Also crammed in there are modules to handle mobile payments made by NXP Semiconductors NV, which Qualcomm is in the process of acquiring for $47 billion.
If everything goes as Broadcom plans, the three suppliers would all come together to create one of the world's largest chipmakers. A deal between Broadcom and Qualcomm would be the biggest ever in the technology business, concentrating immense power over the supply chain for smartphones that would ripple through the electronics industry.
Further, AnandTech reports:
One of the reasons why Broadcom is pursuing Qualcomm is because the latter's stock has been on a decline for several quarters now, whereas shares of Broadcom have been growing (so, inverstors may want to sell their Qualcomm shares). An important reason why Broadcom needs Qualcomm are cellular technologies of the latter. Broadcom clearly understands the importance of 5G and other current endeavors of Qualcomm, including server CPUs, SoCs for AR/VR, IoT and so on. Therefore, purchasing Qualcomm is a way to ensure a long term growth and relevance for Broadcom.
Previously: Broadcom Buys Network Gear Maker Brocade for $5.5 Billion
Qualcomm Files New Lawsuit Against Apple, Alleging it Shared Confidential Information with Intel
Broadcom moving legal headquarters back to the USA
Broadcom (AVGO:NASDAQ) has decided to move its legal headquarters from Singapore to the USA according to AP and Reuters. This brings $20 billion in annual revenue back into the USA. The company will increase spending for research and engineering in the USA.
Broadcom Ltd. is coming back to the USA!
"WASHINGTON – A $100 billion semiconductor company based in Singapore will legally relocate its home address to the United States, President Donald Trump announced Thursday.
Broadcom Limited, which manufactures communications chips around the world, said it would relocate its legal address to Delaware once shareholders approve the move, bringing $20 billion in annual revenue back to the U.S. The move will allow Broadcom to avoid a cumbersome federal review process." http://www.foxbusiness.com/features/2017/11/02/white-house-announces-companys-return-to-us.html
Original Submission #1 Original Submission #2 Original Submission #3
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The Orange County Register reports
Irvine chipmaker Broadcom Corp. will be purchased by Singapore-based Avago Technologies Ltd. for $37 billion, making the deal the biggest technology acquisition ever.
The two companies said they expected the deal to produce $750 million in savings over the first 18 months of their union. The new company will take Broadcom's name, Avago's CEO, Hock Tan, will retain his leading role in the newly combined enterprise.
[...] The purchase of Broadcom, the biggest maker of Wi-Fi chips for short-range connections in mobile devices, will create the world's sixth-largest chipmaker in terms of revenue. The deal is the latest in a round of consolidation in the $300 billion industry as the rising costs of production and design push manufacturers to combine.
[...] Broadcom is closing its unit that makes modem chips for mobile phones. That is reducing losses and expenses in a business that failed to gain significant market share from Qualcomm Inc.
Have any Soylentils had dealings with Avago which indicate that (notoriously closed) Broadcom will now become more open?
[Editor's Comment: Original Submission]
Consolidation in the chip-making industry continues apace as Qualcomm discusses a possible merger with NXP Semiconductors:
Qualcomm is in discussions to buy NXP Semiconductors in what would be another act of consolidation in the chip-making industry, a person briefed on the matter said on Thursday. If completed, a deal could be valued at more than $30 billion, given NXP's market value of roughly $28 billion as of Wednesday's market close. Talks were continuing and could still fall apart.
A union of Qualcomm and NXP would be the latest in an industry that has recently experienced big mergers. Earlier this year, SoftBank of Japan struck a takeover deal for ARM Holdings, a British chip designer, for $32 billion. Last year, Avago Technologies bought Broadcom for $37 billion, while Intel paid nearly $17 billion for Altera.
Also at TechCrunch, Reuters, Bloomberg, and Ars Technica .
Broadcom is looking to broaden its markets with the purchase of Brocade Communications Systems:
Broadcom Ltd. agreed to buy Brocade Communications Systems Inc. for $5.5 billion, expanding beyond its main business in chips to add boxes that help connect storage systems to computers in data centers.
Broadcom, one of Silicon Valley's most aggressive acquirers, said it plans to sell Brocade's other communications technology businesses to avoid competing with companies that now buy Broadcom chips.
The deal stands to help Broadcom reduce its reliance on sales of wireless chips for smartphones, a market that has slowed lately. Apple Inc., its largest customer, in October said it sold 45.5 million iPhones in the quarter ended in September, 2.5 million fewer than a year earlier.
Also at NYT, Reuters, Broadcom.
Broadcom was itself bought by Avago Technologies for $37 billion in 2015. Avago then renamed itself Broadcom.
Qualcomm accuses Apple of helping Intel with chip software
The patent licensing battle between Apple and Qualcomm keeps getting more heated. Wednesday, Qualcomm filed another lawsuit against Apple, this time alleging Apple shared confidential Qualcomm software information with its chip rival, Intel. The breach of contract lawsuit said Qualcomm gave Apple "unprecedented access to Qualcomm's very valuable and highly confidential software, including source code." In return, Apple agreed to take steps to keep the software confidential and secure. But Qualcomm said instead it found that Apple shared information with Intel.
In one instance, Apple requested confidential software information from Qualcomm and cc'd an Intel engineer on the message, Qualcomm said.
Qualcomm wants a court to declare Apple breached the agreement and award damages, among other demands. "As the direct and proximate result of Apple's conduct, Qualcomm has suffered significant damages in an amount to be proven at trial," the filing said.
Apple also hasn't complied with Qualcomm's rights to audit Apple's compliance with the provisions of their software agreement, Qualcomm said in its lawsuit. It wants to do so to make sure Apple hasn't shared more information with Intel.
Also at Bloomberg, AppleInsider, and MacRumors.
Previously: U.S. Federal Trade Commission Sues Qualcomm for Anti-Competitive Practices
Qualcomm's Good Quarter
Intel Hints at Patent Fight With Microsoft and Qualcomm Over x86 Emulation
Apple vs. Qualcomm Escalates, Manufacturers Join in, Lawsuits Filed in California and Germany
Apple Could Switch From Qualcomm to Intel and MediaTek for Modems
Qualcomm Gets $1.2 Billion EU Fine for Apple Chip Payments
Qualcomm Inc. was fined 997 million euros ($1.2 billion) by the European Union for paying Apple Inc. to shun rival chips in its iPhones.
The largest maker of chips that help run smartphones "paid billions of U.S. dollars to a key customer, Apple, so that it would not buy from rivals," EU Competition Commissioner Margrethe Vestager said in an emailed statement on Wednesday. "This meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were."
Qualcomm struck a deal with Apple in 2011 that pledged significant payments if Apple only used Qualcomm chipsets for the iPhone and iPad devices. That agreement was renewed in 2013 until 2016. Qualcomm warned it would stop these payments if Apple sold another product with a rival chip. This effectively shut out competitors such as Intel Corp. from the market for LTE baseband chipsets used in the 4G mobile phone standard for five years, the EU said.
European Commission press release. Also at Reuters.
Previously: EU Investigates Qualcomm For Antitrust Activities
U.S. Federal Trade Commission Sues Qualcomm for Anti-Competitive Practices
Apple Could Switch From Qualcomm to Intel and MediaTek for Modems
Related: Apple vs. Qualcomm Escalates, Manufacturers Join in, Lawsuits Filed in California and Germany
Qualcomm Files New Lawsuit Against Apple, Alleging it Shared Confidential Information with Intel
Broadcom Offers $105 Billion for Qualcomm; Moves HQ Back to the USA
Broadcom Raises Hostile Bid for Qualcomm to About $121 Billion
Broadcom Ltd. has raised its bid for Qualcomm Inc. to about $121 billion, in an attempt to force what could be the largest-ever technology deal.
The new offer of $82 a Qualcomm share will be Broadcom's final offer, according to a statement Monday. The deal would take the form of $60 in cash and the remainder in Broadcom shares.
Qualcomm's board previously rejected Broadcom's original $105 billion acquisition, and has since dug in against the threat of a takeover, with Chief Executive Officer Steve Mollenkopf dismissing the bid as not being worth consideration.
Broadcom also plans to offer Qualcomm a higher-than-usual breakup fee in the event regulators thwart the deal, according to the sources. Typically, such break-up fees equate to approximately 3 percent to 4 percent of a deal's size.
Previously: Broadcom Offers $105 Billion for Qualcomm; Moves HQ Back to the USA
(Score: 0) by Anonymous Coward on Wednesday November 08 2017, @12:36PM (3 children)
realDonaldTrump would *never* submit a story like that. FAKE NEWS!!
(Score: 2, Interesting) by Ethanol-fueled on Wednesday November 08 2017, @02:48PM (1 child)
If it involves Broadcom moving its headquarters back into the USA, then it is something he would submit.
Now if we could only make that happen and clear Broadcom and Qualcomm of H1-B stinkies, then we'd be golden.
(Score: 3, Touché) by bob_super on Wednesday November 08 2017, @07:04PM
They're coming back just long enough to be allowed to buy QCOM without being "a foreign company", then it's back to Ireland or whatever Paradise Paper tax heaven is in fashion next year.
I'm not sure that merger should be allowed under antitrust rules. You can be sure the EU is going to drag their feet reviewing it for a while.
(Score: 2) by richtopia on Wednesday November 08 2017, @04:33PM
The only inaccuracy is that he didn't take credit for it.
(Score: 2) by Snotnose on Wednesday November 08 2017, @01:23PM (3 children)
They design chips and have outside companies make them.
Bad decisions, great stories
(Score: 2) by bob_super on Wednesday November 08 2017, @07:01PM
They're a fabless chip maker. Not exactly a new concept that we need to argue about.
(Score: 3, Insightful) by tibman on Wednesday November 08 2017, @07:44PM (1 child)
Does that mean Apple doesn't make phones?
SN won't survive on lurkers alone. Write comments.
(Score: 2) by takyon on Wednesday November 08 2017, @11:21PM
https://www.youtube.com/watch?v=P3ALwKeSEYs [youtube.com]
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