Broadcom after rejection: 'Fully committed' to Qualcomm buyout

Reuters

Broadcom's efforts to acquire Qualcomm hit a roadblock Monday as the San Diego-based communications chipmaker rejected Broadcom's $103 billion takeover offer. "Qualcomm's "thanks, but no thanks" response to the unsolicited bid by Broadcom isn't surprising and we would be surprised if at this point, Broadcom didn't move forward with a proxy fight", Loop Capital analyst Betsy Van Hees told Reuters.

Broadcom and Qualcomm battled through press releases on Monday while investors tried to figure whether the two semiconductor giants would actually merge.

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.

Broadcom quickly fired back a few hours later, saying it "remains fully committed" to buying Qualcomm.

Tom Horton, Presiding Director for Qualcomm also believes that the management is focused on increasing value for shareholders. "We continue to believe our proposal represents the most attractive, value-enhancing alternative available to Qualcomm stockholders and we are encouraged by their reaction".


"No company is better positioned in mobile, IoT (internet of things), automotive, edge computing and networking within the semiconductor industry", he said. At the time, Bloomberg sources claimed that Qualcomm's board would likely reject the deal.

On the other hand, Hock Tan, Broadcom CEO who said earlier this month he would revive his company's presence in the United States from Singapore, said he is open to initiating a takeover battle. Broadcom did not immediately return a request for comment.

Qualcomm, which makes the Snapdragon chips found in smartphones and tablets, is the world's No. 3 chip supplier, according to research firm Gartner.

This is just not how these big acquisitions work, usually, these companies sit together, work for a while and try to negotiate important details and then go to the public. After a comprehensive review, conducted in consultation with our financial and legal advisors, the Board has concluded that Broadcom's proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty. This company acquired Broadcom in the year 2015.

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