Broadcom Ltd has started a takeover battle. The chip maker made an unsolicited $103 billion bid for Qualcomm Inc. Hock Tan, the chief executive of Broadcom, also announced that his company has plans moving its legal base to the US. Is it actually going to be a takeover?
Qualcomm is an San Diego based semiconductor and telecommunications equipment company. It derives most of its revenue from chip making and has 224 locations worldwide. Broadcom is a semiconductor maker, their chips are part of the newest iPhone. The company has plans to move his company’s legal headquarters from Singapore to the United States. Is this a way to win political support for a takeover of Qualcomm? What we know for sure is that such a takeover could reshape the mobile phone hardware industry.
As Reuter reported: “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 Inc.” And as the NY Times reported: “Qualcomm is expected to reject the bid as opportunistic and too cheap.”
When there is going to be a takeover…after the conclusion of such a deal Qualcomm and Broadcom would face intense regulatory scrutiny, especially in China. Before Chinese ambitions to buy U.S. chipmakers have been opposed successfully by U.S. regulators.
Read two articles about this topic:
New York Times: Broadcom Targets Qualcomm in Largest-Ever Tech Deal