Broadcom preparing new offer $120 billion for Qualcomm

Broadcom Ltd is preparing a new offer of US$120 billion for Qualcomm Inc. in an effort to increase pressure on the semiconductor company to negotiate. The move continues ahead of Qualcomm's shareholders meeting scheduled for March 6 as Broadcom seeks to replace Qualcomm's board of commissioners by nominating officials for elections.

Broadcom adds Qualcomm at US$80 to US$82 per share. The previous offer was US$70 per share consisting of US$60 per share in cash and US$10 per share. Broadcom also plans to offer Qualcomm a higher separation fee where the cost of termination is generally equivalent to about 3 percent to 4 percent of the deal size.

Tinuku Broadcom preparing new offer $120 billion for Qualcomm

Broadcom's CEO, Hock Tan, can significantly change the terms at the last moment. The company has said the deal could be completed within 12 months after signing an agreement. Qualcomm requires a worldwide regulatory review process that takes more than 18 months and is full of risks.

Qualcomm provides chips to mobile network operators to deliver broadband and data, thereby becoming an exciting acquisition target by Broadcom hoping to expand its offerings in 5G wireless technology. But Qualcomm believes Broadcom's offer is aimed at acquiring companies at a low price.

Qualcomm reported quarterly earnings that beat analyst expectations as demand surged on smartphones and mobile chips. The company was involved in a patent infringement dispute with Apple Inc. Qualcomm also seeks to acquire NXP Semiconductors NV for U$38 billion.