It seems that something very big going to happen again, yes, I am talking about the biggest acquisition in the technology industry. According to the reports, the largest acquisition in the technology industry may be about to happen: semiconductor company Broadcom officially again announced on Monday that it has made an offer to buy the giant chip maker Qualcomm for $121 billion.
Broadcom Wants To Buy Apple’s Biggest Enemy For $121 Billion
In November 2017, the American fabless semiconductor company, of course, Broadcom made an offer to buy Qualcomm for $103 billion. The Qualcomm was quick to reject the proposal, saying it dramatically underestimated the value of the company. Well: Broadcom officially increased its acquisition price recently on Monday (5) to a whopping $121 billion.
As Broadcom is one of the largest suppliers of iPhones components, analysts speculate that the purchase could help resolve the legal battle against the tech giant Apple (or further complicate the fight). The fact is that the market is optimistic: Qualcomm shares are up 12.7% as I write this paragraph, while Broadcom shares are up 5.4%.
According to CNBC, the giant chip maker Qualcomm is expected to resist supply: the value would be below what the company would accept in an acquisition.
In addition, as Bloomberg reports, the merger would create the world’s third-largest chip maker (behind the South Korean giant Samsung and the giant chip maker Intel), which would control a huge part of the smartphone supply chain – but, the deal also faces resistance from regulatory bodies.
If approved by both parties, this would be the largest acquisition in the history of the technology market. With the purchase, Broadcom would also assume Qualcomm’s net debt of approximately $25 billion, which would make the total value of the transaction rise to $146 billion. The agreement would create a semiconductor giant of more than $200 billion.
According to Broadcom, the new proposal is the “best and last” offered by the company. In addition, the agreement provides for a termination fee to be paid by Broadcom if the purchase is not completed in one year. This clause serves to assure investors that the deal will work: as the duo controls a huge slice of the smartphone market, there is a concern that regulators will bar the acquisition.
However, the giant chip maker Qualcomm has yet to comment on the new offer which is offered by the giant American fabless semiconductor company Broadcom.
So, what do you think about this deal? Simply share all your views and thoughts in the comment section below.