$160 billion is the price Qualcomm will be willing to strike a deal at, resulting in its acquisition by Broadcom. This is not an official figure as Qualcomm has yet to declare one, but is based on a new report out of the Financial Times which in turn credits “people involved in the negotiations” for the information, and is the latest development in the ongoing Qualcomm and Broadcom saga.
To put this price into perspective, Broadcom’s opening offer came in at a little over $120 billion. After a number of strategic moves between the two companies, Broadcom lowered its offer to roughly $117 billion, citing Qualcomm’s improved offer in its own acquisition of NXP Semiconductors as the reason. Qualcomm responded to this by stating the new offer was even more inadequate than the first, explaining how it does not take into account a number of aspects including the value added through the NXP purchase. In the detail, the report explains the $160 billion price (including $25 billion in assumed company debt) is based on Broadcom upping its per share offer by a minimum of 15-percent. At the share level, Broadcom’s first offer came in at $82 while the second dropped down to $79. So the new negotiating price is said to represent a minimum increase to $90 per share.
At present, it remains unclear whether the deal will go ahead. As while on the superficial level it would seem Qualcomm has come around to the idea of being acquired, there is the issue of whether Broadcom will be willing to raise its offer enough to satisfy Qualcomm. As the San Diego-based company has already very publicly dismissed previous offers as vastly undervaluing its business and therefore the bottom line figure Qualcomm will be willing to accept after negotiating will likely have a limit. When considering Broadcom more recently decreased its offer (instead of raising it), it too will likely have a finite limit in mind. Although, with Qualcomm’s annual meeting set to take place next week and shareholders set to vote on board member nominations, a lot could change depending on the outcome of the vote. In either case, If this was to go ahead at the new rate it is understood this would represent the biggest tech deal ever.