Menu
Qualcomm and Broadcom finally meet over $121B acquisition offer

Qualcomm and Broadcom finally meet over $121B acquisition offer

The outcome of the meeting will determine whether Qualcomm will engage in negotiations

Qualcomm has met with Broadcom to discuss the latter's revised US$121 billion bid, the first time the chipmakers have discussed what would be the technology sector's largest ever acquisition.

The outcome of the meeting will determine whether Qualcomm, which has resisted Broadcom's takeover approach since November, will engage in negotiations or continue to defend itself by rallying its shareholders, who are scheduled to vote on 6 March on replacing the majority of its board with Broadcom nominees.

Neither side commented on what transpired in the two-hour meeting. Qualcomm said in its statement its board would meet to determine its next steps.

Broadcom's top executives left the meeting with the impression that their Qualcomm counterparts listened to them but did not engage, according to sources familiar with the matter who asked not to be identified because it was private.

The meeting came after Qualcomm rejected Broadcom's revised cash-and-stock bid of US$82 per share last week and said the new offer still undervalued it and fell well short of the firm commitments on regulatory issues it expected.

Qualcomm had said it would take the meeting to allow Broadcom to explain how it would attempt to bridge the gaps in both value and deal certainty and to better understand the issues that remained unaddressed in its proposal.

Qualcomm said last week that Broadcom's plan to address antitrust concerns by selling two Qualcomm businesses, its Wi-Fi networking processors and RF Front End chips for mobile phones, was inadequate to allay concerns that the deal would not win regulatory approval.

The takeover battle is at the heart of a race to consolidate the wireless technology equipment sector, as smartphone makers such as Apple and Samsung Electronics use their market dominance to negotiate down chip prices.

Broadcom is mainly a manufacturer whose connectivity chips are used in products ranging from mobile phones to servers. San Diego-based Qualcomm primarily outsources the manufacturing of its chips which are used for the delivery of broadband and data, a business that would significantly benefit from the rollout of 5G wireless technology.

Qualcomm has argued that signing a deal with Broadcom could create uncertainty with its customers during the time it takes to complete the deal. Broadcom has promised to pay a breakup fee of US$8 billion in the event regulators thwart the deal, as well as a "ticking" fee of six per cent per year on the cash portion of the consideration if the deal takes more than 12 months to close.

(Reporting by Greg Roumeliotis in New York; Additional reporting by Muvija M in Bengaluru; Editing by Sriraj Kalluvila and Cynthia Osterman)


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags qualcommbroadcomchips

Featured

Slideshows

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

Hundreds of leaders from the New Zealand IT industry gathered at the Hilton in Auckland on 17 November to celebrate the finest female talent in the Kiwi channel and recognise the winners of the Reseller News Women in ICT Awards (WIICTA) 2020.

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards
Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

The leading female front runners of the New Zealand ICT industry joined together for the annual Reseller News Women in ICT Awards event at the Hilton in Auckland, during which hundreds of guests celebrated 13 outstanding individuals who won awards, chosen from more than 50 finalists representing over 30 organisations.

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards
Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

More than 500 channel leaders gathered in Auckland on 21 October at the ​Reseller News Innovation Awards ​2020 to celebrate the achievements of the New Zealand technology industry's top partners, start-ups, vendors, distributors and individuals.

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners
Show Comments