Qualcomm plans to snub Broadcom’s $103 billion offer
According to news sources and insiders, Qualcomm might be planning to reject the initial offer of $103 billion, that was made by Broadcom. According to sources, Qualcomm’s Chief Executive Steven Mollenkopf has been in talks with shareholders to discuss the offer and the general feeling is that the offer can be upped. If the deal goes ahead, and it still could, it will be the biggest technology takeover ever. The biggest deal in recent times was by Dell – they acquired EMC for $67 billion in 2015.
Broadcom made the offer last week and while jaws dropped at how impressive the offer was, Qualcomm isn’t planning on giving in without a fight. Considering Qualcomm’s value in the smartphone market, thanks to its Snapdragon processors, along with its presence in wireless infrastructure, the move is not completely unexpected. Broadcom is one of the biggest chipmakers in the world, making products for smartphones, wireless communications, data center servers, etc.
The move would not completely surprise Broadcom, as it expected a bit of resistance. Chief Executive Han Tock made a reference to proxy fights to have the board replaced so that the deal goes through, in a statement last week. He said, “We are well advised and know what our options are, and we have not eliminated any of those options. We have a very strong desire to work with Qualcomm to reach a mutually beneficial deal.” If the deal goes ahead, Broadcom-Qualcomm could become one of the biggest chipmakers, just behind Intel and Samsung.
The offer comes at a time when Qualcomm is weakened by its ongoing legal battle against Apple, one of its biggest customers. While Apple is suing the chipmaker for $1billion in the US, Qualcomm has filed a lawsuit to stop the sales of the popular smartphone in China and Taiwan.
A Qualcomm spokesperson said, “ Apple employs technologies invented by Qualcomm without paying for them,” stating that the iPhone’s power management and Force Touch features are just “ a few examples of the many Qualcomm technologies that Apple uses to improve its devices and increase its profits. ”
Apple responded by saying “ Apple believes deeply in the value of innovation, and we have always been willing to pay fair and reasonable rates for patents we use. In our many years of ongoing negotiations with Qualcomm, these patents have never been discussed and in fact were only granted in the last few months. Regulators around the world have found Qualcomm guilty of abusing their position for years. This claim is meritless and, like their other courtroom manoeuvres, we believe this latest legal effort will fail. ”
