Broadcom may acquire Qualcomm amid existential legal battle with Apple

Albert Gea  Reuters

Shares of wireless chip technology giant Qualcomm (QCOM), at $81 billion in market cap, are up $3.86, or nearly 7%, at $58.70, and were up 9% at one point, following a headline from Bloomberg that even bigger giant Broadcom (AVGO) is "exploring a possible takeover" of Qualcomm.

Qualcomm shares jumped more than 12 percent, to $61.55 in late trading following a Bloomberg story, which cited unnamed sources familiar with the deal.

Broadcom, formerly based in Irvine before it was bought by Avago Technologies, is speaking to advisers about the potential deal. No final decisions have been made and there's no guarantee a deal will go ahead.

- Shares in Broadcom, which makes semiconductors for networking and wireless equipment, were up almost 5 percent in afternoon trading on the Nasdaq. Broadcom's stock also rose on the report, adding $14.13 or 5.45% to $273.63.




That gave Qualcomm a current total market value of $91 billion. This week, Broadcom said it would move its headquarters from Singapore back to the us, where it lists an HQ in San Jose, California.

A tie-up between Broadcom and Qualcomm could help alleviate the damage from that battle, however. Broadcom, created in 2016 when Avago Technologies Ltd. acquired then-Broadcom Corp. for $37 billion, has built itself from a former division of Hewlett Packard into one of the industry's largest chipmakers via a string of purchases.

Its competitor Qualcomm finds itself in a weakened state. Qualcomm, based in San Diego, could become a key domestic asset for the company, as Broadcom already has a California co-headquarters in San Jose.

At issue are the licensing fees that Qualcomm charges for patents that cover the basics of how mobile phone systems work. Broadcom also supplies is a major supplier of parts for Apple's iPhone, and new management might be better positioned to resolve the dispute, Bloomberg noted.

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