Broadcom launches hostile bid for Qualcomm to set stage for takeover battle
Any deal would face intense regulatory scrutiny, especially in China
Chip maker Broadcom Ltd made an unsolicited US$103 billion bid for Qualcomm on Monday, setting the stage for a takeover battle that could reshape the industry at the heart of mobile phone hardware.
Qualcomm said it would review the proposal but the San Diego-based company is inclined to reject the bid as too low and fraught with risk that regulators may reject it or take too long to approve it, people familiar with the matter said.
Broadcom Chief Executive Hock Tan, who turned a small, chip maker into a US$100-billion company based in Singapore and the United States, said he would not rule out a proxy fight to convince shareholders to replace the board and accept the offer.
“We are well advised and know what our options are, and we have not eliminated any of those options,” said Tan, who has pulled off a string of deals over the past decade. “We have a very strong desire to work with Qualcomm to reach a mutually beneficial deal.”
A combined Broadcom-Qualcomm would become the dominant supplier of chips used in the 1.5 billion or so smartphones expected to be sold around the world this year. It would raise the stakes for Intel Corp, which has been diversifying from its stronghold in computers into smartphone technology by supplying modem chips to Apple.