Broadcom & Qualcomm – $120 billion takeover (BAW5)

As you may be aware Broadcom had previously offered $70 per share to Qualcomm share holders in an attempt to acquire Qualcomm which made the offered amount around $100 billion… the biggest acquisition in history… unfortunately Qualcomm refused the offer as it believed that Broadcom had undervalued the company.

The battle goes on and apparently Broadcom are now offering around $80-$82 per share which would value the acquisition at around $120 billion and Broadcom seems to believe that the deal could be completed within 12 months.

It appears that Broadcom are targeting Qualcomm mainly for access to advanced 5G wireless networking technology, especially as Qualcomm currently has unrivalled market share in the LTE manufacturing game (with Apple being one of the major clients).  With the race on to get 5G up and running as soon as possible, this would give Broadcom a major advantage in the race.

Looking back through the history of Broadcom, you can see some interesting items, for example, in April 2009, settling years of legal battles with Qualcomm over wireless patents which meant that Qualcomm had to pay $891 million in cash to Broadcom over a four-year period ending June 2013.

Broadcom are known to make large acquisitions as well.  Looking back to 2011, there was the acquisition of Netlogic Microsystems for $3.7 billion, followed by Broadlight ($230 million) and Wisair ($1 million) in 2012.  More noticeably though, in 2013, the acquisition of LSI for $6.6 billion, followed by Emulex in 2014 for $609 million and finally Brocade Communications Systems in 2016 for $5.9 billion.  None of these are anywhere near as large as the proposal for Qualcomm.

We’ll have to see whether this goes as smoothly as Broadcom hopes, but Qualcomm could even benefit if the deal does not go ahead due to a higher than normal breakup fee (this is normally around 3-4% of the total acquisition offer – meaning Qualcomm could easily walk away with at least $5 billion even if the deal falls through)

 

Blog-a-Week 2018 Posting (BAW):

In previous years, I have had periods throughout the year where I have been unable to post an entry to my blog.  During 2018, my aim is to post a blog entry each week of the year.  I’m hoping that the blog entries will all be useful bits of information or items that I’ve been working on recently but if the standard of the entries drops, I apologise now, as this could have been a busy week and I wasn’t able to put in as much time as I would have liked into the post

About the Author

Dinger

I have been in IT for the past 15 years and using virtualisation technologies for around the past 8 years. I started, as quite a lot of people do, working with PCs after playing with such iconic systems like the ZX81, ZX Spectrum and then progressing through 386s, 486s, Pentiums etc. After being headhunted at sixth form to work for a small company based around Hertfordshire, UK. I began working with small businesses and gaining a lot of hardware experience. Three years later, after helping to increase the size of the business, I needed to gain exposure to a larger environment to progress my own career. I joined a large manufacturing company around Electronic Test and Measurement which progressed my skills onto more PC work, hardware work and then onto Server Operating Systems. I progressed again onto a consultancy company based in Reading, UK. Initially working as an engineer performing hardware / software installations for larger companies contracted out to the consultancy company, I moved up into a Consultant position continuing my travel across the UK assisting and providing solutions to companies. I finally moved on again to my current position, working back in Hertfordshire, UK. Again working for a large manufacturing company, this time with over 50,000 users worldwide. I am responsible for the datacenter hardware, the storage environment, the vmware environment and also implementing their new Citrix XenApp farm. My days are busy but also productive, its a friendly environment and in my four years of being with the company, I have seen many changes in technology and infrastructure in use within the company. About the site I started this site as I had been thinking of having more of a presence on the web for a while. On a daily basis, I perform tasks and use tools that others may not use or may not think to do and therefore I thought that I would share some of these experiences and tips with others to help with their day to day work. Currently, my main focus of work is around VMware and Veeam Backup & Replication but hopefully as my tasks progress, I’ll be able to share useful bits of information about other areas of IT as well.

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