Qualcomm shares spike on reports of planned Broadcom bid

Qualcomm shares spike on reports of planned Broadcom bid

With its profits plummeted more than 90 percent in the latest earnings call, Qualcomm could be fighting a losing legal battle with Apple, giving Broadcom the flawless opportunity to acquire the chipmaker in what could be the largest chip business acquisition ever.

The semiconductor firm has a long history in the industry and a tradition of not staying too attached to one particular name, and with Avago presumably adopting Broadcom's moniker due to the latter having a more established name, a potential tie-up with Qualcomm could also see Qualcomm's name live on.

Bloomberg, which was the first to report the news, said Broadcom has yet to make a final decision on the move. Qualcomm's shares shot up almost 13 percent in midday trading today after the report, for a valuation of about $92 billion. Broadcom stock, meanwhile, is trading up almost 6.5 percent. Qualcomm is looking to complete a $40 billion acquisition of NXP Semiconductors, while Broadcom has a $5.5 billion offer for Brocade Communications that it is waiting to complete.

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Both Broadcom and Qualcomm have pending deals that could be affected by a merger.

Formerly known as Avago Technologies, Broadcom Limited was created a year ago after Singapore-based Avago acquired Broadcom Corporation for $37 billion. A subsequent report in the Wall Street Journal said the bid could come as early as this weekend. Qualcomm's shares soared 12.71% on the rumor, or $6.97, to $61.81. Apple, in suing Qualcomm, thinks the company is nonetheless overcharging for use industry standard patents, which the law requires be licensed out on fair, reasonable, and non-discriminatory (or "FRAND") terms.

The reports came one day after Tan held a news conference with President Trump to announce that Broadcom, now based in Singapore with a primary USA office in San Jose, plans to move its corporate domicile to the United States. Qualcomm, a major supplier of chips for wireless handsets, was up 14 percent.

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