Broadcom Bids To Buy Qualcomm In Record-Setting Tech Merger

Broadcom's logo.

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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. 

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The Bloomberg Business Summit 2013 Speakers Announced

Chicago

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The annual Bloomberg Business Summit brings together some of the most bright minds and influential people from around the world to discuss vital issues facing multinational corporations in 2014. This list includes more than 250 CEOs, senior executives, and public sector officials and thought leaders. This year the summit is being held at the Art Institute of Chicago in November. While this date is a ways off, the list of speakers was just announced and is getting quite a bit of buzz.

So far, the most prominent and well known people announced have been:

  • Barry Diller: Chairman and Senior Executive, IAC; Chairman and Senior Executive, Expedia
  • Paul E. Jacobs, Chairman and Chief Executive Officer, Qualcomm Incorporated
  • John G. Stumpf, Chairman, President and Chief Executive Officer, Wells Fargo & Company
  • Henry Kravis & George R Roberts, Co-Founders, Co-Chairmen and Co-Chief Executive Officers, KKR
  • Sir Martin Sorrell, Chief Executive Officer, WPP Group
  • Karen W. Katz, President and Chief Executive Officer, The Neiman Marcus Group, Inc.

Bloomberg Business Summit’s overview states that, “Nearly every major industry is somehow undergoing significant transformation. For the developed world, it creates a disadvantage for decades and sometimes centuries old corporations. In the developing world it has spawned a new crop of global competitors free of legacy processes and philosophies. The Bloomberg Business Summit will look at how some of the world’s biggest industries are changing and the forces at work behind the change.”

To join the conversation on Twitter, tweet with the hashtag “#Bsummit.”

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