Chip maker Broadcom Ltd is up to set a record of making the biggest bid ever by offering $103 billion deal to Qualcomm. If this is going to be accepted by Qualcomm, this will reshape the industry at the heart of mobile phone hardware.
But it seems that Qualcomm is not interested in the deal. As per the sources, the company thinks that the bid is too low and fraught with risk that regulators may reject it or take too long to approve it.
Hock Tan, Chief Executive of Broadcom stated in a statement that he would not rule out a proxy fight to convince shareholders to replace the board and accept the offer. He said, “We are well advised and know what our options are, and we have not eliminated any of those options,” He further said that the company has a very strong desire to work with Qualcomm to reach a mutually beneficial deal.
It is forecasted by the experts of the industry that a combined Broadcom-Qualcomm would become the dominant supplier of chips used in the 1.5 billion or so smartphones expected to be sold around the world this year. This move is supposed to raise the stakes for Intel Corp, which has been diversifying from its stronghold in computers into smartphone technology by supplying modem chips to Apple Inc.
Shares of Qualcomm, whose chips allow phones to connect to wireless data networks, traded above $70 as recently as December 2016 and topped $80 in 2014. They rose 1.1 percent to $62.52, suggesting that this deal would happen.
On the other hand, Broadcom shares rose 1.4 percent to $277.52 after touching a record of $281.80.