Asian chip maker Broadcom has already been trying to buy Qualcomm, the US company responsible for the smartphone processors of the Snapdragon line. Broadcom had already made an offer of about $ 130 billion, which Qualcomm declined; now, according to sources heard by Reuters, the Asian company intends to increase supply.
The total value of the declined offer provided for a $ 70 per Qualcomm share payment. According to the site’s sources, however, Broadcom would be prepared to offer up to $ 82 per share. Assuming that the total value of the agreement increases proportionately, the new bid can reach a total of more than $ 152 billion.
This is an exorbitant value, which would put this as the biggest merger in the history of technology. According to data from the World Bank, this price is roughly equivalent to Qatar’s GDP in 2016, and higher than the GDP of countries like Ecuador, Hungary, Morocco and Ukraine.
In addition to the absurd value, Broadcom would also be prepared to offer a higher than usual rate of contract breach. In general, where such an agreement can not be fulfilled for any reason, one company pays the other about 3% to 4% of the total value of the agreement. Broadcom, however, plans to offer more.
That’s because there’s a good chance that Qualcomm’s purchase of Broadcom will not happen even if the two companies agree. Even before being formalized, the proposed acquisition has already caused concern among some of the regulators who would need to approve the deal – and has also worried other technology giants like Apple and Microsoft.
For Broadcom, an agreement may be closed in the next 12 months. Qualcomm, however, is not so optimistic: according to her, the regulatory approval process for the acquisition to be released would last at least 18 months. According to the maker of the Snapdragon processors, the Chinese company’s proposal is an attempt to buy the company at a price below what it is worth because of recent events such as a billion dollar fine that Qualcomm has taken in Europe.
Precisely because of this, Engadget believes that Broadcom’s plan can work. After all, if it was more money than Qualcomm wanted, the Asian company can offer. In addition, Broadcom would also end up buying some of the issues that Qualcomm has now, such as a lengthy legal dispute with Apple.