Qualcomm offers to meet Broadcom as it rejects $146bn bid, wins 5G customers

Qualcomm signalled a more cordial tone while rejecting Broadcom’s latest takeover offer, as it announced a number of new handset deals for its 5G New Radio (5G NR) chipset.

In a letter to Broadcom CEO Hock Tan, Qualcomm claimed that the $146 billion offer made on Monday (5 February) had once again “undervalued” the company.

It cited what it said was a lack of value ascribed to Qualcomm’s acquisition of NXP, the resolution of licensing disputes and its opportunity in 5G.

It also claimed Broadcom had failed to address regulatory hurdles, which could cause “enormous” damage to Qualcomm if it committed to a deal which then did not go through due to being blocked by one of many regulators.

Broadcom may beg to differ, arguing in its most recent bid that any takeover would be completed within a year and offering compensation if deadlines were missed.

Qualcomm’s response overnight was consistent with its previous criticisms of Broadcom’s initial offer of $130 billion back in November. Broadcom responded by attempting to oust Qualcomm’s board, nominating 11 candidates ahead of the election at the company’s annual general meeting on 6 March.

However, despite rejecting the proposal, Qualcomm offered to meet Tan in order to “address the serious deficiencies in value and certainty in [Broadcom’s] proposal”.

It has been a busy 24 hours for Qualcomm, with the chipset maker also setting a deadline of 23 February to buy the remaining 1.5 percent of shares in NXP, which it agreed to take over in late 2016.

Qualcomm also announced its Snapdragon X50 5G NR modem family had been selected by device makers and mobile operators worldwide for their projects involving the standard.

Operators including BT, Deutsche Telekom, Orange, TIM and Vodafone have all committed to use the X50 in their trials of 5G NR in both the sub-6GHz and mmWave bands.

In addition, original equipment manufacturers including Fujitsu, HMD Global, HTC, LG, Sony, Xiaomi and ZTE will use the modems in their 5G NR mobile device product launches starting in 2019.

The good business news for Qualcomm comes after it was recently slapped with a fine of nearly €1 billion by the European Union for allegedly damaging competition. The company is appealing the punishment.