Communications chipmaker Broadcom Ltd is planning to unveil a bid for smartphone chip supplier Qualcomm Inc by Monday, two sources familiar with the matter said on Friday, an attempt to create a roughly $200-billion company in what would be the biggest technology acquisition ever.
A tie-up would combine two of the largest makers of wireless communications chips for mobile phones and raises the stakes for Intel Corp, which has been diversifying into smartphone technology from its stronghold in computers.
The value of Broadcom’s bid has not been decided, though an offer in the range of around $70 to $80 per share is being contemplated, one of the sources said. At $70 a share, an offer would value Qualcomm at $103 billion.
Qualcomm is not aware of the details of Broadcom’s bid, and it is far from certain whether it will entertain this deal, the sources said.
“It’s a smart move that would make Broadcom into a tech juggernaut,” said GBH Insights analyst Daniel Ives.
Qualcomm declined to comment, while Broadcom did not immediately respond to a request for comment.
Moving base to US
The bid comes as Broadcom plans to move its headquarters to the United States from Singapore, President Donald Trump said on Thursday at a White House event where Chief Executive Hock Tan cited Republican tax efforts. It is currently incorporated in Singapore and co-headquartered there and in San Jose, California.
Broadcom’s acquisition would be the most ambitious move by Tan, who has turned a small, scrappy chipmaker into a $100-billion company with a string of deals, since he took the helm a decade ago.
The proposal raises questions about whether Qualcomm will close its pending $38-billion acquisition of NXP Semiconductors NV. NXP is one of the largest makers of chips for vehicles and expanding into self-driving technology.
Qualcomm, an early pioneer in mobile phone chips, supplies so-called modem chips to phone makers such as Apple, Samsung and LG that help the phones connect to wireless data networks.
Broadcom is also a major supplier to many of the same companies for Wi-Fi chips.
Broadcom’s Wi-Fi chips are essentially a commodity and priced much lower than the modem chips.
The only other major supplier of high-end chips is Intel Corp, which supplies about half of the modem chips in Apple’s iPhones. Purchasing Qualcomm would give Broadcom a much more lucrative line of business in the mobile phone markets.