Broadcom is mulling $100B bid to buy chip giant Qualcomm

Broadcom is mulling $100B bid to buy chip giant Qualcomm

Broadcom is mulling $100B bid to buy chip giant Qualcomm

Bloomberg News first reported the deal, saying an unsolicited bid could be for around $70 a share.

A tie-up between Broadcom and Qualcomm could help alleviate the damage from that battle, however. Qualcomm's stock is down 16 percent this year, excluding the jump prompted by the Broadcom news today, and it suffered a staggering 90 percent drop in profit in its fourth quarter earnings released earlier this week.

Broadcom Chief Executive Officer Hock Tan is a voracious acquirer, and he's played a key role in a wave of consolidation engulfing the $300 billion semiconductor industry over the last three years. Broadcom itself was reborn in 2016 when Avago Technologies Ltd. acquired Broadcom Corp. for $37 billion.

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Broadcom, created in 2016 when Avago Technologies Ltd. acquired then-Broadcom Corp. for $37-billion, said this week it will return its headquarters to the USA from Singapore.

Qualcomm finds itself in a weakened state. Shares are down almost 16% this year due to legal battles with Apple and the loss of royalties from Apple and an unnamed second licensee. Qualcomm is looking to complete a $40 billion acquisition of NXP Semiconductors, while Broadcom has a $5.5 billion offer for Brocade Communications that it is waiting to complete. The Wall Street Journal quickly confirmed the news in its own report. Even though Qualcomm's component is considered to be the best, Apple is trying to get back at the company for various patent and legal issues.

The deliberations come as Qualcomm, based in San Diego, California, tries to close its $47-billion purchase of NXP Semiconductors NV. Qualcomm, a major supplier of chips for wireless handsets, was up 14 percent. The two companies are already among the top ten providers of chips ranked by revenue in an industry that's consolidating rapidly.

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