Broadcom to now offer $120B for Qualcomm takeover

By : |February 5, 2018 0

Broadcom has decided to increase its offer for chipmaker Qualcomm to $120 billion from the current $103 billion bid that was put on the table last November, and rejected by Qualcomm. The development was first reported by Reuters.

The latest offer will value Qualcomm at between $80 and $82 per share. Previously the company was offered $70 a share which consisted of $60 per share in cash and $10 per share in stock. Qualcomm rejected this offer.

In addition to raising the value of its bid, Broadcom is said to be enticing Qualcomm to go along with the acquisition by raising the value of the break-up fee, which is normally 3 to 4 percent of the total size of a transaction. Broadcom will pay the higher fee to its target if the deal is rejected by the US regulatory authorities.

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Broadcom has said that it could wrap up a deal within a year, but Qualcomm has said it would more likely take 18 months and could easily run into trouble. Qualcomm has told its investors that Broadcom’s aggressive bidding is aimed at acquiring the company cheaply.

Qualcomm provides chips to mobile carrier networks to deliver broadband and data, making it an attractive acquisition target for Broadcom, which hopes to expand its offerings in the 5G wireless technology.

On the other hand, Qualcomm is trying to acquire NXP Semiconductors for $38 billion. The deal was approved by the European Union antitrust regulators last month, and only China is left for approval.

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