Broadcom offers to buy Qualcomm in $130bn deal

Qualcomm declined to comment while Broadcom did not immediately respond to a request for comment

The combined Broadcom and Qualcomm, including NXP, will have pro forma fiscal 2017 revenues of approximately $51 billion and pro forma 2017 EBITDA of approximately $23 billion, including synergies.

"This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products", Hock Tan, resident and chief executive officer of Broadcom, said in a statement Monday.

Broadcom shares rose 1.4 per cent to US$277.52 after touching a record of US$281.80.

"Qualcomm will have no further comment until its board of directors has completed its review", the company said.

"Now it's a game of high-stakes poker for both sides", he said.

However, the Financial Times reports two unnamed sources who claim that Qualcomm's shareholders could be set to reject the takeover, claiming the valuation is too low and the merger would face significant regulatory challenges.

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The company has also got commitment letter for $5 billion debt financing from private equity Silver Lake Partners. Analysts say that if Broadcom can salvage the Apple relationship, it would sharply increase potential returns from the takeover.

Broadcom approached Qualcomm previous year to discuss a potential combination, but did not contact Qualcomm prior to unveiling its $70 per share offer on Monday, according to sources.

Qualcomm is now trying to close its pending $38-billion acquisition of NXP Semiconductors, a leading supplier of chips for vehicles that is also expanding into self-driving technology, and it is believed that Broadcom is open to acquiring NXP.

It is said that if Broadcom merges with Qualcomm, combination of Broadcom with Qualcomm will make Broadcom third largest Chip makers in the world. It has pulled off a string of purchases over a decade.

Broadcom has offered to buy Qualcomm for $70 (£53) per share in a cash and stock deal that values the company at $103bn (£78.6bn).

Tan visited President Trump at the White House last week to announce that Broadcom would be moving its headquarters from Singapore to Delaware.

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