As the fight between Qualcomm and Broadcomm reaches tipping point, both companies prepare to face off big deals in a $100 billion take over bid. Qualcomm Inc. is trying to grow off the take over bid, claiming that it is an unsolicited move on Broadcomm Ltd.’s part and it not only undermines the company but also lessens the effectiveness of the people working with these plans.
Come November 7, it is expected that Broadcomm will offer $70 per share, however, it is also expected the Qualcomm will definitely argue that this bid, which is seemingly the largest acquisition in the world of technology, is merely a plan to buy the chipmaker at a very low cost. As regulators might challenge Broadcomm, it is probable that Qualcomm will take the case to shareholders, while its management board tries to buy more time to consider the offer. If the shareholders reject the proposal, as Qualcomm is hoping they will, Broadcomm will have to go for a proxy fight if they still want to pursue this take over.
For almost a year, Broadcomm Ltd. has been trying to get the approval on the proposal of buying Brocade Communications Systems Inc. which is of course a much smaller bid than Qualcomm Inc. If for this purchase too, a regulatory limbo is put on, prolonging the deal, the Qualcomm will probably point out the fact that this uncertainty is not good for the company, as it casts doubt on the value of it. Right now, Qualcomm Inc. is actually in the process of purchasing the chip supplying company NXP Semiconductors NV, and in case both these end up joining Broadcomm Ltd., the result would be in the form of the third largest chip producer globally, fully invested in the creation of a colossus controlling the important pieces required by any smartphone development company.
Thus with such potential bids, Qualcomm seems to be in quite a fix, right after the January lawsuit filed by Apple which claimed that Qualcomm was using unfair means to draw profits and also the record fines charged in South Korea and Taiwan, as it waits to fend off Broadcomm’s acquisition.