Broadcom proposes $130 billion deal to buy Qualcomm

The proposed offer is the largest deal ever in the tech industry, The Associated Press reports.

Some Wall Street analysts have mused that the deal comes at an opportune time for Qualcomm, which has faltered in recent years with lackluster earnings and revenue growth.

Both the S&P 500 and the Dow Jones industrial average hit new record highs Monday after news broke that Broadcom proposed to acquire Qualcomm in a deal valued at $130 billion. The proposal is part-cash and part-stock and entails an offer of $70 per share, representing a premium above 25%.

It is likely that Qualcomm will reject the bid, as it believes that its value is far below what the company is worth.

Broadcom and Qualcomm are no strangers to acquisitions, with the pair in talks to complete multibillion-dollar deals.

Tan visited President Trump at the White House last week to announce that Broadcom would be moving its headquarters from Singapore to Delaware. NXP is one of the largest makers of chips for vehicles and expanding into self-driving technology, and Broadcom also is open to acquiring NXP, according to one of the sources.

Qualcomm shares rose up by 3.6 percent in premarket trading this Monday in NY.

Qualcomm has a (long) pending acquisition, of chipmaker NXP Semiconductors NV, in the works - and Broadcom notes that its offer is not dependent on whether or not Qualcomm manages to close with NXP on the now disclosed terms (it's offering ~$39BN for the Netherlands-based chipmaker which has a focus on car-related applications and also security-based identification).

"This complementary transaction will position the combined company as a global communications leader with an impressive portfolio of technologies and products", Hock Tan, resident and chief executive officer of Broadcom, said in a statement Monday.