Published: Mon, November 13, 2017
Finance | By Loren Pratt

Qualcomm Rising: Rejects Broadcom Bid for 'Significantly Undervaluing'

Qualcomm's board of directors on Monday unanimously rejected an offer from rival chip maker Broadcom to buy the company.

Broadcom said there are "compelling financial benefits" to such a deal and Qualcomm's portfolio and global market reach would be complementary to Broadcom's business.

Broadcom made the offer just days after its CEO visited the White House to tout the company's plans to move its operations to the U.S.

Broadcom will reportedly offer $70 per share, which Reuters' sources say "undervalues the company and does not price in the uncertainty associated with getting the deal approved by regulators". Qualcomm and Broadcom did not immediately respond to requests for comment.

Meanwhile, Qualcomm is trying to acquire NXP for $38 billion but NXPs shareholders are reluctant. Qualcomm does not plan to significantly raise its price for NXP as a defensive strategy to make its acquisition by Broadcom more expensive, according to one of the sources.

Qualcomm builds chips for carrier networks, allowing them to offer end clients broadband and mobile data.

Qualcomm CEO Steve Mollenkopf added that the United States chip maker has a future in mobile, the Internet of Things (IoT), edge computing and networking within the semiconductor industry, and the firm has no doubt of future growth in these areas. "We are confident in our ability to create significant additional value for our stockholders as we continue our growth in these attractive segments and lead the transition to 5G", said Steve Mollenkopf, chief executive officer of Qualcomm.

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