Published in Network

Broadcom makes a Qualcomm offer

by on06 November 2017

Fudzilla calls it highly unlikely

The part of Wall Street that covers IT is shaking as Broadcom - trading as Avgo - has made an official offer to take over Qualcomm at $70 per share in a $130 billion cash and stock deal.

The deal would involve $60 per share in cash and the rest would be in stock, which according to the current trading price would be a 28 percent premium over the market closing time on Thursday. So, that's before a big mouth decided to talk and hike the stock price up.

Very unlikely to happen

Without going too much into the essence of the offer, the Fudzilla team believes that this is highly unlikely to happen. There is a bunch of reasons and one of the key ones would be cultural and roadmap differences.

Broadcom is a network focused company with some automotive aspirations, while Qualcomm is a licensing company, an excellent SoC company, a world leading 4G firm and, in the future, 5G providers as well as a company that has great automotive aspirations with or without the NXP acquisition.

Broadcom is weaker of the two

If you look at the network market, Broadcom lost a lot of design wins to Qualcomm, especially in high end routers, among other markets, and Broadcom would gain a lot by snapping up Qualcomm.

This would likely create a big disruption to Qualcomm’s internal roadmaps, would jeopardize the time to market of some crucial projects such as 5G and get the newly merged company in a lot of regulatory trouble.

Qualcomm still has to finish the acquisition of NXP for $47 billion and still has to get the green light from European Union for that. Imagine how many complications it would create by Broadcom buying Qualcomm which is just about to finish digesting NXP. It would get the new entity in more trouble.

The  acquisition would be great news for Apple as Qualcomm will just be disrupted by the whole thing, something that suits Apple.

Let’s wait and see. But again, from where we stand, and from conversations with several industry sources, this is very unlikely to happen. For what it’s worth, it would be more logical if Qualcomm snapped up Broadcom, not the other way around.

Last modified on 06 November 2017
Rate this item
(0 votes)

Read more about: