You might have heard that Broadcom recently bid $130 billion to acquire Qualcomm. It was an unsolicited offer as Qualcomm has not offered itself for sale. Broadcom argued that this deal is compelling for the stakeholders and stockholders of both companies. Qualcomm was reportedly thinking about rejecting the offer and the company has now officially announced that it has decided not to accept Broadcom’s $130 billion offer.
Broadcom has offered a very significant amount of money for Qualcomm. If the latter had accepted, the combined entity would have gone on to become the third largest semiconductor manufacturer in the world.
The rejection of Broadcom’s offer is a unanimous decision by Qualcomm’s board of directors. The company is of the view that the offer “significantly undervalues” Qualcomm relative to its position in the industry and its future growth prospects.
“No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry,” said Qualcomm CEO Steve Mollenkopf.
Since Qualcomm is a public company it was obligated to peruse the offer and the board has come to the decision that it’s better to reject Broadcom’s bid. The board and management have reiterated their commitment to driving value for the company’s shareholders.
The board has also expressed confidence in the CEO and his team’s execution of the strategy that aims to provide “far superior value to Qualcomm shareholders than the proposed offer.”
It’s unclear at this point in time if Broadcom is going to make a revised bid for Qualcomm. The company has not commented on this latest development as yet.