Broadcom offers to acquire Qualcomm for $70 per share

Qualcomm declined to comment while Broadcom did not immediately respond to a request for comment

Qualcomm declined to comment while Broadcom did not immediately respond to a request for comment

Bloomberg News reports Qualcomm is preparing to fend off the offer by arguing the bid undervalues its business and could face regulatory scrutiny.

It's not a done deal, however.

It is likely that Qualcomm will reject the bid, as it believes that its value is far below what the company is worth. Publicly, Qualcomm has only said it is "evaluating" the deal.

According to CNBC, Broadcom brought the offer to Qualcomm privately more than a year ago but was rebuffed.

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The proposed deal would see Broadcom paying a 28% premium on shares for its rival but is reliant on Qualcomm completing its $38 billion takeover of NXP, which has yet to close.

Qualcomm is now trying to close its pending $38-billion acquisition of NXP Semiconductors, a leading supplier of chips for vehicles that is also expanding into self-driving technology, and it is believed that Broadcom is open to acquiring NXP.

The deal would dwarf Dell Inc.'s $67 billion acquisition of EMC in 2015 - then the biggest in the technology industry.

Reuters reported that Broadcom had not contacted Qualcomm about the offer prior to Tan's letter.

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In a statement, the company said: "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".

President Donald Trump appeared with Broadcom Corp. We refer investors to our November 3 note, written after Bloomberg and The Wall Street Journal surfaced rumors about the potential bid, but in short, we see a sound strategic rationale for such a deal, and the financial component is especially attractive for Broadcom because we value Qualcomm at $68 per share on a stand-alone basis.

The bid comes as Broadcom plans to move its headquarters to the United States from Singapore.

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