Qualcomm up after rumor of Broadcom interest

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Broadcom Ltd.is exploring a deal to acquire Qualcomm Inc., according to people familiar with the matter, in what could be the biggest ever takeover of a chip maker.

The news, reported by Bloomberg today, would value Qualcomm shares at around $70, and investors immediately responded enthusiastically by sending Qualcomm stock up almost 14 percent in what Bloomberg says is the largest stock movement for the company in almost a decade.

As for Broadcom, its CEO Hock Tan has a huge appetite when it comes to acquisitions and states that he is interested in more deals, which could be halted thanks to the intervention of US regulators since Qualcomm is a USA -based technology company. A final decision on whether to proceed has not been made, they said.

The $70-per-share price values Qualcomm at $103.2 billion.

Shares of Broadcom closed up 5.5% Friday after the report, while Qualcomm's stock surged 12.7%.

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The saga kicked off almost a year ago, in January 2017, when Apple first filed a lawsuit against Qualcomm for allegedly abusing its market position to extract more money from hardware manufacturers. It is now incorporated in Singapore and co-headquartered there and in San Jose, California.

A tie-up between Broadcom and Qualcomm could help alleviate the damage from that battle, however.

Broadcom, based in Irvine, was acquired in 2016 by Avago Technologies, a Singapore based semiconductor outfit that has been growing through acquisitions - including LSI Corp., PLX Technology, Emulex and others.

This comes at a time when Qualcomm itself is trying to complete a $47 billion purchase of NXP Semiconductors. Reports surfaced this week that Apple was considering eschewing Qualcomm chips entirely in its iPhones and iPads beginning next year in what would a major blow for the San Diego-based chipmaker.

With the introduction of the iPhone 7 and iPhone 7 Plus, Apple brought in Intel for its LTE chips and there have been rumors that the iPhone manufacturer might also bring in MediaTek to bring an end to the business relationship with Qualcomm.

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