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Thread: Broadcom Explores Deal to Buy Chipmaker Qualcomm!

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    Broadcom Explores Deal to Buy Chipmaker Qualcomm!

    Chipmaker Broadcom exploring deal for Qualcomm: Bloomberg | Reuters

    First of all, this makes a ton of sense for Broadcom, it would be great for shareholders of both companies. However, I would think there would be serious anti trust concerns here. The companies compete heavily in a number of markets, and the combination would create an absolute juggernaut in the SoC market, especially if the NXPI deal also goes through. Thoughts?

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    Admin Daniel Nenni's Avatar
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    Broadcom Explores Deal to Buy Chipmaker Qualcomm!

    Exciting times in the semiconductor industry! Representatives for Broadcom and Qualcomm declined to comment but the people who I know are quite excited about it. Except of course Qualcomm employees... But with systems companies building IC teams I seriously doubt that anyone will be unemployed for more than a minute or two.

    Broadcom Explores Deal to Buy Chipmaker Qualcomm!-broadcom-qualcom.jpg


    • Cash-and-stock bid of about $70 per share expected in days
    • Broadcom offer would be biggest-ever takeover of a chipmaker


    Broadcom Ltd. is considering a bid of more than $100 billion for Qualcomm Inc., according to people familiar with the matter, in what would be the biggest-ever takeover of a chipmaker.

    Broadcom is speaking to advisers about the potential deal, said the people, who asked not to be identified because talks are private. The offer of about $70 a share would include cash and stock and is likely to be made in the coming days, the people said. A final decision on whether to proceed has not been made, they said.

    Qualcomm shares rose as much as 19 percent in New York in their biggest move since October 2008. They traded up 12 percent at 2:23 p.m., valuing the company at $91 billion. Broadcom rose 4.7 percent, for a market valuation of $111 billion.

    Broadcom Explores Deal to Buy Chipmaker Qualcomm - Bloomberg

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    Thanks for consolidating the thread

    Yes, Hock Tan is also known as a cost cutter, so QCOM employees should rightly be concerned. I think it's very bad for competition and consumers, since Broadcom is also known for increasing prices. The company, in my opinion, is like the Valeant of the semiconductor industry (but with perhaps slightly better ethics), where they buy companies, eliminate R&D, cut spending to the bone, and escalate prices. Again, great for shareholders, not great for the semiconductor industry.

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    Wonder what would happen to the NXP deal?

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    Quote Originally Posted by Bernard Murphy View Post
    Wonder what would happen to the NXP deal?
    It will not get done.....

    I saw Hock Tan in Taiwan last month for the TSMC 30th. He is an interesting man and clearly he knows how to turn a profit. Broadcom really was gutted. Hock is also into politics it seems:

    Broadcom redomiciling to U.S. from Singapore | Reuters

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    Blogger Bernard Murphy's Avatar
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    Must be getting something out of repatriation

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    Chipmaker Marvell Technology in talks to buy Cavium: Wall Street Journal

    I am hearing even more M&A rumblings.... it looks like we are heading for another mega M&A cycle....

    (Reuters) - Marvell Technology Group Ltd is in advanced talks to buy Cavium Inc - a deal that would create a chipmaker worth about $14 billion, Wall Street Journal reported.

    Cavium shareholders would receive a modest premium, the report said, citing people familiar with the matter. A deal could be announced in the next few weeks if talks do not fall apart.

    Chipmaker Marvell Technology in talks to buy Cavium: Wall Street Journal | Reuters

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    Expert hist78's Avatar
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    Quote Originally Posted by Daniel Nenni View Post
    It will not get done.....

    I saw Hock Tan in Taiwan last month for the TSMC 30th. He is an interesting man and clearly he knows how to turn a profit. Broadcom really was gutted. Hock is also into politics it seems:

    Broadcom redomiciling to U.S. from Singapore | Reuters

    From reading the news about Broadcom redomiciling to US from Singapore, it's not that clear how much in it are real and how much in it are PR/propaganda.

    "Our move would domicile our $20 billion annual revenue in the United States. From our base here, each year we will invest $3 billion in research and engineering and $6 billion in manufacturing, resulting in more high-paying tech jobs."

    1. Broadcom trailing twelve months revenue is US$17 billion. So the the $20 billion annual revenue claim required a 20% growth. Will it happen in one year, two years, or 5 years? Are they going to get there through the natural growth or M&A?

    2. I assume people understand the $3 billion research and engineering Broadcom talked about is their worldwide spending. It doesn't mean they will spend such amount in US alone.

    3. I also assume people understand Boradcom is a fabless company who doesn't own and operate too many factory. Broadcom has and will contract out the manufacturing need to other contract manufacturers (TSMC, Samsung, GF, UMC, etc...). So the "$6 billion in manufacturing" is probably a great number to say in a news release but might not mean much to the United States' domestic manufacturing.

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    I agree completely, it looks to be mostly PR which is why I said politics. I wonder what will be said when Hock Tan lays off thousands of QCOM employees? Not really a job creation type of guy.

    Quote Originally Posted by hist78 View Post
    From reading the news about Broadcom redomiciling to US from Singapore, it's not that clear how much in it are real and how much in it are PR/propaganda.

    "Our move would domicile our $20 billion annual revenue in the United States. From our base here, each year we will invest $3 billion in research and engineering and $6 billion in manufacturing, resulting in more high-paying tech jobs."

    1. Broadcom trailing twelve months revenue is US$17 billion. So the the $20 billion annual revenue claim required a 20% growth. Will it happen in one year, two years, or 5 years? Are they going to get there through the natural growth or M&A?

    2. I assume people understand the $3 billion research and engineering Broadcom talked about is their worldwide spending. It doesn't mean they will spend such amount in US alone.

    3. I also assume people understand Boradcom is a fabless company who doesn't own and operate too many factory. Broadcom has and will contract out the manufacturing need to other contract manufacturers (TSMC, Samsung, GF, UMC, etc...). So the "$6 billion in manufacturing" is probably a great number to say in a news release but might not mean much to the United States' domestic manufacturing.

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    Even if Broadcom does not enter in the equation, given the current regulations hurdles (EU investigations still on hold for months (June) despite recent latest Qualcomm concessions on NXP IP...) and the significant price up, well above their current 110$/share that Qualcomm will have to concede to reverse the constant decrease of NXP shares tendered to their offer (currently as low as 3.6% vs the 80% targeted to close the deal...), NXP acquisition by Qualcomm is anyway far from being a done deal (even already dead ?)...

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