Qualcomm rejects Broadcom’s $103bn takeover offer

14 Nov 2017

Image: jejim/Shutterstock

Sorry Broadcom, but the offer doth butter no parsnips, says Qualcomm.

Smartphone chipmaker Qualcomm has rejected Broadcom’s $103bn takeover offer, saying it undervalued the company.

Qualcomm also warned that such a merger would face significant regulatory hurdles.

“It is the board’s unanimous belief that Broadcom’s proposal significantly undervalues Qualcomm relative to the company’s leadership position in mobile technology and our future growth prospects,” said Paul Jacobs, executive chair, and chair of the board of Qualcomm.

Qualcomm, whose chips power billions of 3G and 4G smartphones around the world, counts Apple as one of its top customers, but is embroiled in a bitter $1bn legal battle over alleged anticompetitive tactics.

Thanks, but no thanks

A deal between Broadcom and Qualcomm would help the latter to settle its legal battle with Apple, since Broadcom has a closer relationship with the iPhone maker.

Broadcom said it would seek to engage with Qualcomm’s board and management.

Shares in Qualcomm were up 1.8pc in overnight trading to $65.74.

Broadcom can now raise its bid or launch a hostile takeover by enlisting shareholders to its cause.

However, Qualcomm is likely to dig in for a lengthy siege.

“No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry,” said Steve Mollenkopf, CEO of Qualcomm.

“We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G,” he added.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years