Qualcomm Rejects $130 Billion Broadcom Merger Proposal

Steven Mollenkopf CEO of Qualcomm

Do you think the deal would have been for or against the interests of Qualcomm?

Qualcomm rejected this deal of 103 Billion dollars after an unanimous decision made by the company's directors.

US chipmaker Qualcomm Inc (QCOM.O) is making preparations to reject rival Broadcom Ltd's (AVGO.O) $103 billion bid as early as this week, four people familiar with the matter said on Sunday, setting the stage for one of the biggest-ever takeover battles.

As we said when the proposal was announced, it's likely that Broadcom also smelled blood in the water, because Qualcomm is now fighting a battle on multiple fronts, what with the ongoing dispute with Apple, the Federal Trade Commission (FTC) investigation, and other conflicts.

The rejection comes after Broadcom last week offered to swap each Qualcomm share for $70, including $60 in cash and $10 worth of Broadcom stock, and assume $25 billion in net debt.

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Qualcomm CEO Steve Mollenkopf added that the U.S. chip maker has a future in mobile, the Internet of Things (IoT), edge computing and networking within the semiconductor industry, and the firm has no doubt of future growth in these areas.

It was also said the offer does not price in the "uncertainty associated with getting the deal approved by regulators".

This could lead to a higher bid from Broadcom in the future, but there's no word on when Broadcom might make another offer.

Qualcomm said Monday that it's in a unique position to grow on its own.

Broadcom CEO Hock Tan, who said earlier this month he would redomicile his company to the United States from Singapore, has stated he is open to launching a takeover battle. Qualcomm, famous for inventing 2G and 3G wireless network technology, now sells the mobile chips for smartphones and the radios that enable cellular communications. That's no small amount of money, and it would have ranked as the tech industry's largest acquisition ever. After consulting with its financial advisors, the company concluded that Broadcom's $70-per-share proposal represents a significant undervaluation.

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