Qualcomm turns down Broadcom's $130 billion offer

Looks like Qualcomm is not too happy with what Broadcom has to offer.

By Chandrika

    As speculated, Qualcomm has rejected Broadcom's $130 billion bid to buy the California-based chipset maker. The company had received a non-binding, unsolicited proposal from Broadcom Limited last week.

    Qualcomm turns down Broadcom's $130 billion offer

    Qualcomm's Board of Directors met yesterday and decided to turn out the deal that could have been the biggest in the chipset making as well as the tech industry. The Verge reports the company believes that Broadcom's offer "dramatically undervalues Qualcomm," and moreover, "comes with significant regulatory uncertainty." However, things could turn out different in the future if Broadcom comes up with a better deal.

    Basically, Broadcom wanted to acquire all of the outstanding shares of Qualcomm for per share consideration of $60.00 in cash and $10.00 in Broadcom stock. Apparently, this was not enough for Qualcomm. Even though the deal is not happening, Qualcomm got some benefits out of the deal. For example, after the rumors about the merger emerged online, the company's stock prices went up.

    Qualcomm's Board of Directors also thinks that the company is currently well positioned to "lead the transition to 5G".

    Notably, even if Qualcomm had agreed to the deal, there are still many factors that would have played a part in this. Regulatory authorities would have to approve it as well as the stockholders of both firms.

    What makes it more complex is the fact that the company is already in the middle of many legal disputes. Also, it is also criticized for not licensing its standard-essential patents in a fair, reasonable and non-discriminatory manner.

    Having said all these, if the deal had worked out, there will definitely be some positive things that would come out of it.

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