Qualcomm is yet to publicly respond to the offer, but Broadcomm has made outlined its offer in detail.
Broadcom is offering $70 per share to be received by Qualcomm stockholders which would consist of $60 in cash and $10 per share in Broadcom shares.
Broadcom says its proposal represents a 28 per cent premium over the closing price of Qualcomm common stock on November 2, 2017, the last unaffected trading day prior to media speculation regarding a potential transaction, and a premium of 33 per cent to Qualcomm’s unaffected 30-day volume-weighted average price.
The Broadcom proposal stands whether Qualcomm’s pending acquisition of NXP Semiconductors is completed on the currently disclosed terms of $110 per NXP share or the transaction is terminated.
The proposed transaction is valued at approximately $130 billion on a pro forma basis, including $25 billion of net debt, giving effect to Qualcomm’s pending acquisition of NXP on its currently disclosed terms.
Hock Tan, president and CEO of Broadcom, says: “Broadcom’s proposal is compelling for stockholders and stakeholders in both companies.
“Our proposal provides Qualcomm stockholders with a substantial and immediate premium in cash for their shares, as well as the opportunity to participate in the upside potential of the combined company.
“This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products.
“We would not make this offer if we were not confident that our common global customers would embrace the proposed combination.
“With greater scale and broader product diversification, the combined company will be positioned to deliver more advanced semiconductor solutions for our global customers and drive enhanced stockholder value.”
Tan adds: “We have great respect for the company founded 32 years ago by Irwin Jacobs, Andrew Viterbi and their colleagues, and the revolutionary technologies they developed.
“Following the combination, Qualcomm will be best positioned to build on its legacy of innovation and invention.
“Given the common strengths of our businesses and our shared heritage of, and continued focus on, technology innovation, we are confident we can quickly realize the benefits of this compelling transaction for all stakeholders.
“Importantly, we believe that Qualcomm and Broadcom employees will benefit from substantial opportunities for growth and development as part of a larger company.”
Thomas Krause, Broadcom CFO, says: “The Broadcom business continues to perform very well. Broadcom has completed five major acquisitions since 2013, and has a proven track record of rapidly deleveraging and successfully integrating companies to create value for our stockholders, employees and customers.
“Given the complementary nature of our products, we are confident that any regulatory requirements necessary to complete a combination with Qualcomm will be met in a timely manner.
“We look forward to engaging immediately in discussions with Qualcomm so that we can sign a definitive agreement and complete this transaction expeditiously.”