Home / Recent News / Apple supplier Qualcomm rejects $105 billion takeover bid from Broadcom
Apple supplier Qualcomm rejects $105 billion takeover bid from Broadcom

Apple supplier Qualcomm rejects $105 billion takeover bid from Broadcom

Last week, chip large Broadcom made an unsolicited takeover bid for Qualcomm, Broadcom’s rival and the largest producer of modems and processors for high-end smartphones. A deal would have large implications for the semiconductor enterprise, and by extension, considerably change how smartphones are designed and made.

But Qualcomm, whose stock value has plummeted due to an ongoing approved dispute with Apple, launched this morning that it’s rejecting Broadcom’s unsolicited provide.

“It is the Board’s unanimous belief that Broadcom’s proposal significantly undervalues Qualcomm relative to the Company’s leadership position in mobile technology and our future growth prospects,” acknowledged Paul Jacobs, Executive Chairman and Chairman of the Board of Qualcomm Incorporated.

“No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry.  We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G,” acknowledged Steve Mollenkopf, Chief Executive Officer of Qualcomm Incorporated.

Those two statements, put out alongside the data that Qualcomm is rejecting the bid, go some technique to exhibiting the gameplan proper right here. Qualcomm’s motive for rejecting the provision — “Broadcom’s proposal significantly undervalues Qualcomm” — hints that the company may be additional receptive to the following bid. Broadcom’s preliminary bid totaled about $105 billion.

A takeover switch from Broadcom correct now appears to be a shrewd try to capitalize on Qualcomm’s current low stock value. Qualcomm is in the middle of a approved dispute with Apple, which could successfully end up having an enormous impact on Qualcomm’s enterprise method. Currently, Qualcomm sells processors and modems to handset producers on the scenario that these producers moreover pay for the utilization of Qualcomm’s patents, by means of a royalty fee than can be as rather a lot as 10% of a cellphone’s selling value. Apple has balked on the amount it’s paying to Qualcomm, and is on the lookout for to renegotiate these phrases. If Apple is worthwhile, completely different producers would possibly observe swimsuit, and Qualcomm may very well be in a world of injury.


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