Cambridge-based staff at two US technology giants were placed on red alert as Broadcom tabled a $130 billion bid for Qualcomm, setting up the prospect of the biggest tech deal in history with the UK a key battleground.
Broadcom is based locally at Cambridge Science Park while Qualcomm already had a presence in the cluster before acquiring CSR and Nujira and consoliidating at Cambridge Business Park.
Inside track intel suggests Qualcomm will bat the bid away but that Broadcom could well go hostile.
Cambridge and US chip makers Arm and Intel also await developments with interest as Broadcom’s acquisition of Qualcomm would create the largest supplier of chips to the wireless industry.
With Broadcom set to redomicile and change the parent company of the corporate group from Singapore to a US corporation, the Qualcomm scalp is considered a key statement of intent. But Qualcomm will not go quietly.
Broadcom is offering $70 a share. Factored in is $25 billion of net debt, giving effect to Qualcomm’s pending acquisition of NXP on its currently disclosed terms.
Hock Tan, president and CEO of Broadcom said: “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.
“This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products.
“We would not make this offer if we were not confident that our common global customers would embrace the proposed combination. With greater scale and broader product diversification, the combined company will be positioned to deliver more advanced semiconductor solutions for our global customers and drive enhanced stockholder value.
“Following the combination, Qualcomm will be best positioned to build on its legacy of innovation and invention. Given the common strengths of our businesses and our shared heritage of, and continued focus on, technology innovation, we are confident we can quickly realise the benefits of this compelling transaction for all stakeholders.
“Importantly, we believe that Qualcomm and Broadcom employees will benefit from substantial opportunities for growth and development as part of a larger company.”
Qualcomm paid $2.4bn for CSR and $50m for Nujira in 2015.
• PHOTOGRAPH: Broadcom is based at Cambridge Science Park
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