Broadcom plans record tech deal with Qualcomm bid: Sources

SAN FRANCISCO • Communications chipmaker Broadcom is planning to unveil a bid for smartphone chip supplier Qualcomm by tomorrow, according to three sources familiar with the matter, in what they said was an attempt to create a roughly US$200 billion (S$273 billion) company through the biggest technology acquisition ever.

A tie-up would combine two of the largest makers of wireless communications chips for mobile phones and raise the stakes for Intel, which has been diversifying into smartphone technology from its stronghold in computers.

The value of Broadcom's bid has not been decided, though an offer in the range of around US$70 to US$80 a share is being contemplated, one of the sources said. At US$70 a share, an offer would value Qualcomm at US$103 billion.

The bid comes as Broadcom plans to move its headquarters to the United States from Singapore. US President Donald Trump commented on the move last Thursday at a White House event where Broadcom chief executive Tan Hock Eng cited Republican tax efforts. It is currently incorporated in Singapore and co-headquartered there and in San Jose, California.

Broadcom's acquisition would be the most ambitious move by Mr Tan, who has turned a small chipmaker into a US$100 billion company with a string of deals, since he took the helm a decade ago.

Qualcomm, an early pioneer in cellphone chips, supplies so-called modem chips to phone makers such as Apple, Samsung and LG that help the phones connect to wireless data networks, while Broadcom is also a major supplier to many of the same companies for Wi-Fi chips.

Shares of Qualcomm jumped 12.7 per cent to US$61.81, while Broadcom's stock climbed nearly 6 per cent to US$273.63 last Friday afternoon.

REUTERS

A version of this article appeared in the print edition of The Sunday Times on November 05, 2017, with the headline 'Broadcom plans record tech deal with Qualcomm bid: Sources'. Print Edition | Subscribe