Broadcom Bids To Buy Qualcomm In Record-Setting Tech Merger

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Qualcomm is a world titan when it comes to wireless technology, but we may soon be witnessing a shift of power in the industry.

According to a Reuters report, the Singapore tech giant Broadcom is making a push to buy the U.S. corporation. This week, Broadcom made its “best and final offer” of a whopping $121 billion. Qualcomm’s board of directors is reviewing the offer. If accepted, it would be the biggest acquisition in the history of the technology sector.

The news comes amid an ongoing heated battle for control of the wireless equipment industry. Historically, Qualcomm has made a profit by licensing its technology for the delivery of broadband and data to phone manufacturers, but the company is now in the middle of a patent dispute with Apple involving licensing agreements. Broadcom’s executives believe now would be the right time for Qualcomm to bow out of the industry and sell. 

“Qualcomm got where it did in the last 30 years with a business model hinging on intellectual property licensing that is, at this day and age, not sustainable,” Broadcom chief executive Hock Tan told Reuters.

These latest remarks from Tan are the continuation of a long line of criticism that Broadcom’s leadership has directed at Qualcomm. Tan has been openly critical of Qualcomm CEO Steve Mollenkopf in recent years, pointing out that Qualcomm’s total shareholder return since 2005 has been a hideous negative 7 percent. He believes that under Broadcom’s direction, the brand can do better.

Broadcom’s new offer to buy the company consists of $82 per share—$60 in cash and $22 in Broadcom stock. Its previous offer was $70 per share—$60 in cash and $10 in stock. Increasing the amount of stock in the deal means the offer will be contingent upon a Broadcom shareholder vote. So far, investors have been hush on whether or not they support the acquisition.