$130 billion isn't enough for Broadcom to take over Qualcomm

Qualcomm rejected Broadcom's $105 billion acquisition offer on Monday, but the battle has just begun. The company wants to sell the chips in everything from Internet of Things (IoT) devices and cars to phones and tablets.

"The board has concluded that Broadcom's proposal dramatically undervalues Qualcomm and comes with significant regulatory uncertainty", Qualcomm presiding director Tom Horton said in a statement.

The two companies have largely complementary product lines in wireless communications, and some overlap in areas of that market including Wi-Fi and Bluetooth.

Broadcom itself has yet to close its $5.5bn acquisition of Brocade which was announced in November previous year, while Qualcomm is still wrangled in regulatory processes following its $38bn deal for Dutch semiconductor NXP. A combination with Broadcom would not have propelled it past industry leaders Intel and Samsung.

Our scenario analysis examines Qualcomm earnings in various iPhone royalty scenarios with and without Huawei royalties.

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Broadcom Ltd., also announced, in the company of President Donald Trump, that it would bring its corporate address back from Singapore, to Delaware.

Broadcom has also been deliberating the possibility of raising its bid for Qualcomm, including through more debt financing, some of the sources said, although it was not clear when Broadcom would choose to make such a move.

Qualcomm CEO Steve Mollenkopf added that the USA chip maker has a future in mobile, the Internet of Things (IoT), edge computing and networking within the semiconductor industry, and the firm has no doubt of future growth in these areas. European regulators suspended their investigation while waiting for Qualcomm and NXP to supply documents. Broadcom is reportedly prepared to up its offer somewhat from its current level, although it's unclear how much higher they might be willing to go.

Qualcomm has a message for its prospective buyer: Sorry, but we're worth more than you think.

But Qualcomm's beaten down stock price showed far less optimism among investors that a deal could be consummated quickly.

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