Microchip Takeover Fails For Now: Qualcomm Tells Broadcom"No Thank You"
It's been a week of big headlines between two of the giant microchip makers in the world.
Broadcom made an offer to buy Qualcomm last week that was officially rejected by Qualcomm Monday.
The bid, which was for $105 billion, didn't sit well with Qualcomm officials. A statement released by the Qualcomm board of directors read in part, this deal "significantly undervalues" the company.
Paul Jacobs, Chairman of the Board of Qualcomm noted in the statement, “It is the Board’s unanimous belief that Broadcom’s proposal significantly undervalues Qualcomm relative to the Company’s leadership position in mobile technology and our future growth prospects.”
Qualcomm's CEO Steve Mollenkpf said, "No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry. 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."
QUALCOMM SHARES JUMP
Qualcomm stock was up nearly 2 percent in trading on Monday to $66/share.
Shares of Broadcom were down about .5 percent to $263.95.
Both companies count Apple among their top customers. Although Qualcomm and Apple have had signficant legal issues over the years. Market experts believe a deal between Broadcom and Qualcomm would help Qualcomm settle its legal battles with the iPhone maker.
QUALCOMM MAKES DEAL IN CHINA
Qualcomm executives joined President Trump on his Asia trip and signed $12 billion worth of deals with three Chinese mobile handset makers. The Qualcomm agreement was part of over $250 billion package of deals unveiled between U.S. and Chinese firms during Trump’s first state visit to China.
Mollenkopf released a statement on the trade deal stating, “We are continuing our commitment to investing and helping advance China’s mobile and semiconductor industries."