Apple supplier Qualcomm confirms takeover approach by rival Broadcom

Shares in chipmaker Qualcomm jumped on Monday after the Apple supplier received a takeover bid from rival Broadcom worth around $130 billion (£99.1 billion).

Broadcom has offered $70 per share (£53.40) for the firm, which it said represented a 28% premium over Qualcomm's closing share price on November 2, and offered to pick up $25 billion in debt (£19 billion).

Qualcomm said in its own statement that the bid will now be assessed by its board.

"Qualcomm will have no further comment until its board of directors has completed its review," the company said.

Last week, Qualcomm reported revenue of $22.3 billion (£17 billion) for 2017, but Broadcom says the combined company could deliver revenues of around $51 billion (£38.9 billion).

The news sent Qualcomm's NASDAQ shares up 4.5% in early trading.

Broadcom president and chief executive Hock Tan said it was a "complementary transaction" that would position the combined company as a "global communications leader".

"We would not make this offer if we were not confident that our common global customers would embrace the proposed combination," Mr Tan said.

"With greater scale and broader product diversification, the combined company will be positioned to deliver more advanced semiconductor solutions for our global customers and drive enhanced stockholder value."

Qualcomm is best known for being a supplier to Apple, but the two companies are currently locked in a long-running legal dispute as the tech giant is refusing to pay any royalties owed to Qualcomm for some of the features in the iPhone.

Broadcom's bid comes as regulators continue to review Qualcomm's proposed acquisition of NXP Semiconductors for $38 billion (£29 billion).

Broadcom's own $5.5 billion (£4.2 billion) agreement to merge with US network provider Brocade Communications Systems last year has been delayed while it is scrutinised by the US Committee on Foreign Investment (CFI), which investigates proposed acquisitions of US companies by foreign buyers on national security and intellectual property grounds.

But President Donald Trump appeared with Broadcom's chief Mr Tan last week, saying the company will relocate its legal base to the United States - a move which is expected to free Brocade's bid from the CFI review.

The company plans to relocate its legal address to Delaware once shareholders approve the move, bringing $20 billion (£15.3 billion) in annual revenue back to the US.

(function(i,s,o,g,r,a,m){i['GoogleAnalyticsObject']=r;i[r]=i[r]function(){(i[r].q=i[r].q[]).push(arguments)},i[r].l=1*new Date();a=s.createElement(o),m=s.getElementsByTagName(o)[0];a.async=1;a.src=g;m.parentNode.insertBefore(a,m)})(window,document,'script','//www.google-analytics.com/analytics.js','ga');ga('create', 'UA-72310761-1', 'auto', {'name': 'pacontentapi'});ga('pacontentapi.set', 'referrer', location.origin);ga('pacontentapi.set', 'dimension1', 'By Kalyeena Makortoff, Press Association City Reporter');ga('pacontentapi.set', 'dimension2', '02cd2ff9-2614-46f2-97fc-c16ea7e4ca56');ga('pacontentapi.set', 'dimension3', 'paservice:finance,paservice:finance:city,paservice:news,paservice:news:uk');ga('pacontentapi.set', 'dimension6', 'story');ga('pacontentapi.set', 'dimension7', 'composite');ga('pacontentapi.set', 'dimension8', null);ga('pacontentapi.set', 'dimension9', null);ga('pacontentapi.send', 'pageview', { 'location': location.href, 'page': (location.pathname + location.search + location.hash), 'title': 'Apple supplier Qualcomm confirms takeover approach by rival Broadcom'});