Broadcom, an American fabless semiconductor company would also assume a net debt of $25 billion, which would make the total amount rise to about $130 billion. If done, the deal can create a giant of more than $200 billion. Broadcom works in several Qualcomm markets, including modems, ARM processors, and Bluetooth and Wi-Fi connection chips. It has its origins in the 1960s when it was a semiconductor division of HP, but was re-created in 2016 when it was purchased by Avago Technologies for $37 billion. Today, Broadcom is a company with a market value of $112 billion, while Qualcomm is priced at $91 billion. The owner of the Snapdragon processors is in a fragile time: it is in a complex legal dispute against the tech giant Apple and saw its profit plummet 90% in the last quarter, largely due to the interruption of on-lending of royalties from iPhones. 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. So, what do you think about this? Simply share your views and thoughts in the comment section below.
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