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Broadcom explores deal to buy Qualcomm

Broadcom Plans Unsolicited Bid for Qualcomm

Qualcomm is not aware of the details of Broadcom's bid, and it is far from certain whether it will entertain this deal, the sources said.

A deal of this kind aligns with the current industry trend of consolidation, but also keep in mind that Broadcom is the largest maker of Wi-Fi chips in the world, while Qualcomm is the largest maker of modems. The unnamed sources also stressed that no final decision has been made, however, so there is still a chance for Broadcom to not proceed with a bid. No concrete decisions on the matter have yet been reached and it's now unclear what conditions would the semiconductor company be prepared to offer to Qualcomm and what level of a bid would the San Diego, California-based tech giant be prepared to consider. Broadcom's stock rose 4% to $271.09 a share.

Bloomberg broke the news Friday morning, saying people familiar with the matter are talking to advisers about bidding $70 a share, for a total of more than $100 billion, for Qualcomm.

More: Don't want an iPhone 8 or iPhone X? Qualcomm, based in San Diego, could become a key domestic asset for the company, as Broadcom already has a California co-headquarters in San Jose.

Qualcomm faces a multinational legal battle with Apple Inc over Qualcomm's licensing terms to Apple. As a result, there is talk that the 2018 iPhone and iPad models will feature modem chips made by Intel and MediaTek.

It's unclear how the deal could affect Qualcomm's own blockbuster $40 billion takeover of NXP Semiconductors, which was announced a year ago but still hasn't been completed. The chipmaker countersued the Cupertino-based company in April, sought injunctions to halt iPhone sales in the USA and China, and filed a lawsuit over copyright infringement.

A tie-up between the two chipmakers would be the latest in the semiconductor industry that has been rapidly consolidating as companies try to capture a big share of the fast-growing market for connected devices and connected cars. Broadcom is also a major supplier to numerous same companies for Wi-Fi chips.