Home NEWS Technology Broadcom Raises Its Qualcomm Offer to $121 Billion

Broadcom Raises Its Qualcomm Offer to $121 Billion

4 min read

Sponsored links

But the revised offer may entice shareholders of the target company into demanding that its executives begin negotiations. Qualcomm reported a 96 percent drop in operating income last week, as Apple has refused to pay some licensing fees. It is also struggling to complete its own takeover bid, for the chip maker NXP Semiconductor, amid pushback from investors of that company.

For Mr. Tan, who built Broadcom over nearly a decade from a series of takeovers, Qualcomm’s problems are ones that he and his team can fix — and that Qualcomm has not shown that it can do on its own.

“We have a lot of respect for the tech and the innovation that comes with the 5G technology,” he said, referring to the next-generation wireless standard that Qualcomm has touted as its next big business opportunity. “But we believe, given our track record, we can do much more.”

Broadcom did more than raise its offer price on Monday. It also pledged to pay a “significant” breakup fee in case a deal with Qualcomm is vetoed by regulators, as well as to pay additional cash if the two companies have not closed a transaction a year after announcement. It also committed to other steps to closing a transaction, including selling overlapping businesses.

Those moves are meant to highlight Broadcom’s commitment to the deal.

Such assurances may prove important, given questions among analysts and investors over whether a combination of the two could win regulatory approval. There are concerns that the chip industry is increasingly concentrated in just a few hands.

Mr. Tan argued that Broadcom had held constructive talks with regulators around the world, and that his company had a track record of quickly closing deals. He also dismissed Qualcomm’s repeated concerns about antitrust issues.

“Based on what Qualcomm has been spinning the last six months, they’ve been short on specifics and heavy on rhetoric,” Mr. Tan said.

In a statement, Qualcomm said that it was considering the new bid.

Broadcom also said that it would withdraw its offer if Qualcomm rescheduled its annual shareholder meeting from March 6, or if it paid more than the $110 a share that it has already bid for a smaller chip maker, NXP Semiconductor.

The deal would mark a significant change in the chip making industry. Qualcomm is an industry giant, helping build the modern mobile phone sector with its technology. Its collection of patents is one of the most valuable assets in the world of wireless telecommunications. But more recently, it has faced a multitude of legal and shareholder challenges.

Continue reading the main story

Sponsored links
Source link

Load More Related Articles
Load More In Technology
Comments are closed.

Check Also

Dropbox Shares Leap in I.P.O., and Silicon Valley Smiles

“I think the success of Dropbox’s I.P.O. shows that great companies that are built to last…