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Qualcomm rejects Broadcom's record-breaking $105 billion takeover attempt (AVGO, QCOM)

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US chipmaker Qualcomm Inc. is making preparations to reject rival Broadcom Ltd’s $103 billion bid as early as this week

Do you think the deal would have been for or against the interests of Qualcomm?

Due to several reasons, Qualcomm has rejected Broadcom's $130 billion offer and will continue to operate as a separate entity for now. Broadcom CEO Hock Tan, famed for his M&A expertise in the chip industry, said Qualcomm shareholders told him that they were interested in the deal. Another tactic Broadcom could use is to nominate directors for Qualcomm's board ahead of the company's annual general meeting in 2018.

Qualcomm Inc. on Monday rejected Broadcom Ltd.'s $130 billion takeover bid, contending the offer "dramatically undervalues" the company's position in mobile technology and comes with "significant regulatory uncertainty".

Broadcom quickly fired back a few hours later, saying it "remains fully committed" to buying Qualcomm.

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"No company is better positioned in mobile, IoT, automotive, edge computing and networking within the semiconductor industry", Qualcomm's Chief Executive Officer Steve Mollenkopf said in the statement.

United States semiconductor and telecommunications firm Qualcomm rejected a $103bn takeover bid from competitor Broadcom on Monday, saying the offer "dramatically" underestimated the value of the company. Even before the deal was rebuffed Monday, Broadcom had been preparing for a proxy battle in which it would appeal directly to Qualcomm shareholders, according to a Bloomberg News report. Broadcom did not immediately return a request for comment.

Singapore-based Broadcom made the offer last week in what would have consolidated two major players in the booming sector fueled by growth in smartphones and other connected devices. The deal has been delayed by the Committee on Foreign Investment in the United States, which investigates proposed acquisitions of USA companies by foreign buyers on national security and intellectual property grounds. Now we'll have to see if Broadcom returns with a bigger offer (though its initial proposal represented a 28% premium over Qualcomm's share price before Broadcom's plans were reported in the press) or simply gives up.

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