Broadcom proposes $130 billion deal to buy Qualcomm

Broadcom bids $130 Billion to acquire Qualcomm

Broadcom bids $130 Billion to acquire Qualcomm

That's a big if.

Broadcom said its offer stood no matter if Qualcomm completes its purchase of NXP.

Qualcomm has a (long) pending acquisition, of chipmaker NXP Semiconductors NV, in the works - and Broadcom notes that its offer is not dependent on whether or not Qualcomm manages to close with NXP on the now disclosed terms (it's offering ~$39BN for the Netherlands-based chipmaker which has a focus on car-related applications and also security-based identification). The offer represents a roughly 28 percent premium to Qualcomm's closing price on Thursday of $54.84, before speculation about a pending offer from Broadcom sent its shares soaring on Friday. The proposed transaction would be valued at approximately $130 billion, including $25 billion of net debt. Here's a wrap of what they've said so far. "We would not make this offer if we were not confident that our common global customers would embrace the proposed combination". According to reports people involved with Broadcom believe that it will not shy away from initiating a "proxy fight to gain seats on Qualcomm's board of directors in support of its offer".

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One aspect that might be an issue is Qualcomm's efforts to close its $38-billion acquisition of NXP Semiconductors NV, which makes chips for vehicles with an eye to self-driving technology.

"We are positive on the potential of this acquisition as it would bring in complementary cellular products and cost synergies, leading to immediate earnings per share accretion".

Under Broadcom's proposal, the $70.00 per share to be received by Qualcomm stockholders would consist of $60.00 in cash and $10.00 per share in Broadcom shares. "It would value Qualcomm's equity at roughly $103bn". There are now 10 buys, 16 holds and no sells on Qualcomm, with an average price target of $61.74, according to data compiled by Bloomberg.

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