Qualcomm rejects Broadcom's new offering for $ 121 billion

The Board of Directors of Qualcomm unanimously opposed the second proposal of the Singapore Broadcom on the purchase, but the manufacturer of mobile chips is open for negotiations.

Qualcomm rejects Broadcom's new offering for $ 121 billion

The Board of Directors of Qualcomm unanimously opposed the second proposal of the Singapore Broadcom on the purchase, but the manufacturer of mobile chips is open for negotiations.

It will not be enough

After the first failure, Broadcom raised rates by offering $ 121 billion ($ 82 per share) for Qualcomm instead of the original $ 103 billion. Given the repayment of the chipmaker's debt of $ 25 billion, the deal would have been a record $ 146 billion for the IT industry. This is twice the largest in the history of Dell's acquisition of $ 67 billion.

According to Qualcomm, they were again underestimated. Say, the proposal does not take into account the positive impact of buying NXP Semiconductors for $ 38 billion (the company only had to get approval of the Chinese regulator), as well as advances in developing solutions for 5G networks. In addition, in case of problems with the antimonopoly authorities, Qualcomm risks losing a round sum.

Representatives of Broadcom responded that Qualcomm will receive $ 8 billion in penalties if the purchase does fail, as well as additional compensation for the delay after the first year from the signing of the agreement. The potential buyer stressed that their offer is final.

What's next?

Qualcomm is not against selling, but is going to bargain for itself more favorable terms. The company is ready to sit down at the negotiating table, and Broadcom has already agreed to meet to discuss the terms of the deal.

In December Broadcom tried to enlist the support of the board of directors of Qualcomm by replacing 11 members of the board with their candidates. The proposal for re-election was rejected, and unfriendly absorption failed.

Sources: Qualcomm , Broadcom

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