Broadcom Plans $100 Billion Qualcomm Deal to Build Chip Colossus

Broadcom CEO Hock Tan is contemplating $100 billion bid for Qualcomm, according to Bloomberg, citing people familiar with the matter. If that happens it will be the largest technology takeover to build a powerhouse that dominates the market for wireless chips.

An offer of about $70 a share would include cash and stock and is likely to be made in the coming days, said the people, who asked to remain anonymous. Buying Qualcomm would transform Broadcom into the third-largest chipmaker, behind Intel and Samsung, and make it the leader in chips used in the more than 1 billion smartphones sold each year.

The combination would dwarf Dell’s $67 billion acquisition of EMC in 2015, then the biggest in the technology industry. It would also meld Qualcomm’s dominance of chips that connect handsets to wireless networks with Broadcom’s expertise in chips that link devices to Wi-Fi networks.

Qualcomm shares rose as much as 19 percent in New York in their biggest intraday move since October 2008, after Bloomberg News first reported the takeover plans. Broadcom rose 5.5 percent, for a market valuation of about $112 billion. Representatives for Broadcom and Qualcomm declined to comment.

Tan has played a pivotal role in a wave of consolidation engulfing the $300 billion semiconductor industry over the last three years. He laid the foundation for future dealmaking on Thursday. In a widely broadcast announcement alongside U.S. President Donald Trump in the Oval Office, Tan said he will move Broadcom’s headquarters to the U.S. from Singapore.

Aside from the financial challenges of such a large deal, Broadcom may also encounter close regulatory scrutiny. Based on 2016 revenue, the enlarged company would be the world’s third-largest chipmaker. That would give it control of a big part of the supply chain of vital phone components such as Wi-Fi and cellular modem chips. The two companies are already among the top 10 providers of chips in an industry that’s consolidating rapidly.