Broadcom, Qualcomm merger talk sends their shares soaring

Shares of chipmaker Qualcomm Inc. spike more than 15% in intraday trading Friday afternoon following unconfirmed reports it is the target of a pending buyout offer by competitor Broadcom Limited.

Any such “Quadcom” combo would be the biggest in a wave of semiconductor company mergers in recent years as the industry transitions from a decade of explosive growth in smart phone usage worldwide to promising new markets like Internet-connect cars and homes. 

It could cost Broadcom (AVGO) more than $100 billion to acquire Qualcom (QCOM), which was valued at around $90 billion before Friday’s reports sent the latter’s stock soaring. Bloomberg News, citing unnamed sources “familiar with the matter,” cited a possible offer of $70 a share in cash and stock “likely to be made in the coming days” if a decision to proceed is made.

Broadcom CEO Hock Tan already has been in the spotlight this week when he stood in the White House on Thursday beside President Donald Trump, who touted Singapore-based Broadcom’s decision to legally relocate its home address to the United States.

Broadcom said it would relocate its legal address to Delaware once shareholders approve the move, bringing $20 billion in annual revenue back to the U.S. The move will allow Broadcom to avoid a cumbersome federal review process.

The Oval Office announcement was tied to the release of congressional Republicans’ tax reform proposal, which would drastically reduce corporate rates and makes it easier for companies to deduct foreign taxes.

The company credits the GOP plan with making it easier to do business in the U.S. “America is once again the best place to lead a business with a global footprint,” Broadcom’s CEO said.

However, Broadcom’s move to the U.S. will take place regardless of whether the Republican plan passes, the company said.

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