Qualcomm rejects $103bn Broadcom takeover bid

James Pearce
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Chipmaker Qualcomm has claimed a takeover bid from rival Broadcom "dramatically undervalues" the company

Chipset-maker Qualcomm has turned down a $103 billion takeover bid from rival Broadcom claiming the offer was too low and undervalued the company.

“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,” Qualcomm’s presiding director Tom Horton said in a statement.

Broadcom made the bid last night, in what would have been one of the largest mergers in tech history, as consolidation in the semiconductor sector continues.

A unanimous decision from Qualcomm’s board of directors claimed that Broadcom’s offer “dramatically undervalues Qualcomm” whilst a deal would also face significant regulatory uncertainty, the Qualcomm board added.

"Broadcom's proposal is compelling for stockholders and stakeholders in both companies. Our proposal provides Qualcomm stockholders with a substantial and immediate premium in cash for their shares, as well as the opportunity to participate in the upside potential of the combined company," said Hock Tan, president and chief executive officer of Broadcom, when he announced the bid.

The bid came as Qualcomm is in the final stages of completing its own mega merger with NXP Semiconductors, another rival, for $38 billion. It has also been locked in a legal battle with Apple, one of its biggest customers.

An agreement would have pushed the combined firm to become the third-largest chipmaker in the world, behind Intel and Samsung, whilst giving Broadcom a strong foothold in the developing 4G and 5G markets. Broadcom primarily focusses on Wi-Fi and Bluetooth chips. However, Qualcomm’s statement could leave hope for Broadcom as it didn’t rule out a deal completely should the latter come back with a higher offer.