Tech

The biggest ever tech deal is go: Broadcom makes $130bn bid for Qualcomm

Broadcom has officially tabled an unsolicited bid for US chip making giant Qualcomm in a deal valued at $130bn.

The deal, if it goes ahead, would be the biggest ever in the technology industry, eclipsing Dell's $67bn acquisition of EMC in 2015.

Broadcom has made an offer of $70 per share – $60 in cash and $10 in stock.

That's a 20 per cent premium on Qualcomm's closing price on Thursday (2 November), the day before reports that a deal was on the cards first surfaced.

"Broadcom's proposal is compelling for stockholders and stakeholders in both companies," Broadcom's chief executive and president Hock Tan said.

"Our proposal provides Qualcomm stockholders with a substantial and immediate premium in cash for their shares, as well as the opportunity to participate in the upside potential of the combined company."

Qualcomm said in a statement that it will "assess the proposal in order to pursue the course of action that is in the best interests of Qualcomm shareholders".

Tan added that it "would not make this offer if we were not confident that our common global customers would embrace the proposed combination".

"With greater scale and broader product diversification, the combined company will be positioned to deliver more advanced semiconductor solutions for our global customers and drive enhanced stockholder value," he said.

Qualcomm's $47bn deal for NXP, made last year but yet to be completed, is also factored in: Broadcom said the proposed offer stands whether that deal goes through or not.

The deal, which includes $25bn of net debt, would make Broadcom the third biggest chip supplier in the world behind Samsung and Intel.

Broadcom is in the middle of a separate deal for another US tech firm, Brocade, in a takeover valued at £5.5bn agreed last year. The deadline for finalising it was pushed back at the start of October to allow more time for regulatory approval by US authorities, specifically the Committee on Foreign Investment in the United States (CFIUS) which assese the national security implications of foreign investment in the US. The deal is now expected to close by 30 November.

The same US agency blocked the $1.3bn acquisition of US firm Lattice Semiconductor by Canyon Bridge, the Chinese private equity buyout fund which last week closed a £550m deal for the UK chip maker Imagination Technologies.

Broadcom made a timely announcement last week, saying that it plans to redomicile in the US from Singapore.

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