Broadcom Wishes To Buy Qualcomm For $130 Bn With No Questions Asked

Broadcom, one of the world’s largest semiconductor firms, has offered $130 billion to buy Qualcomm, the largest chip maker for plethora of smart communication devices.

The San Jose based Broadcom has offered a value of $70 per share of Qualcomm in the acquisition proposal that would consist of $60 in cash and $10 per share in Broadcom shares.

This valuation is 28% higher over the closing price of Qualcomm common stock on November 2, 2017 and 33% higher than its average valuation over the preceding one month period.

The combined revenue of the three firms in question – Qualcomm, Broadcom and NXP – is expected to touch $51 billion in FY 2017 with EBIDTA of aroud $23 billion, forecasts the semiconductor fiem, justifying its proposal. It also said that Silver Lake Partners is interested in putting in $5 billion to support the transaction.

Broadcom also said this proposal of buying Qualcomm would stay put irrespective of the outcome of the latter’s pending acquisition of NXP.

“Broadcom’s proposal is compelling for stockholders and stakeholders in both companies. 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,” said Hock Tan, President and Chief Executive Officer of Broadcom. “This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products. We 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.”

Qualcomm on Monday confirmed of receiving the proposal from Broadcom.

“The Qualcomm Board of Directors, in consultation with its financial and legal advisors, will assess the proposal in order to pursue the course of action that is in the best interests of Qualcomm shareholders,” Qualcomm said in a statement. “Qualcomm will have no further comment until its Board of Directors has completed its review.”

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