Broadcom considering bid to acquire San Diego's Qualcomm

Broadcom Plans Unsolicited Bid for Qualcomm

Broadcom Plans Unsolicited Bid for Qualcomm

According to a report in the WSJ, Qualcomm, now embroiled in a number of lawsuits with Apple, is apparently about to receive an unsolicited takeover bid from semiconductor designer Broadcom. Shares are down almost 16% this year due to legal battles with Apple and the loss of royalties from Apple and an unnamed second licensee.

According to Bloomberg, Broadcom is now in talks with advisers on how to best approach the potential bid, which is likely to be made official in the next few days.

Broadcom, which has a market value of $110 billion, just announced on Thursday that it's moving its headquarters to the U.S. from Singapore.

Broadcom was created previous year when Tan's Avago Technologies Ltd. bought Irvine-based chipmaker Broadcom Corp. for $37 billion and then adopted the Broadcom name for the combined company. The company already lists San Jose, California, as a corporate co-headquarters.

Most recently, Qualcomm filed yet another lawsuit against Apple, with the chipmaker accusing the iPhone maker of breaching a software license contract.

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Qualcomm's shares have been trading in the low $50s for much of this year - down about 15 percent because of its fierce legal battle with Apple and hefty fines/lawsuits from anti-monopoly regulators in the U.S., South Korea and Taiwan. As a result, there is talk that the 2018 iPhone and iPad models will feature modem chips made by Intel and MediaTek.

Reports in The Wall Street Journal and elsewhere say Apple is contemplating kicking Qualcomm out of its devices entirely, possibly replacing it with Intel chips.

"Maybe they have a better relationship with Apple, maybe they settle", Rasgon said.

The proposal raises questions about whether Qualcomm will close its pending $38-billion acquisition of NXP Semiconductors NV. The deal is facing regulatory examination in Europe and opposition from some shareholders including activist hedge fund firm Elliott Management Corp., which has argued the offer undervalues NXP.

That would give it control of a big part of the supply chain of vital phone components such as wi-fi and cellular modem chips.

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