Published on : Feb 21, 2018
Qualcomm, a U.S.-based semiconductor company, unveiled a US$44 bn agreement targeted to acquire NXP Semiconductors on Tuesday, which is said to be its most bold move in its defense against an intimidating US$121 bn bid from Broadcom, another American semiconductor company. With this new deal, pressure on Broadcom is intensified to decide if it want to stick with a specification in its bid that Qualcomm does not increase its offer for NXP. The Qualcomm's defenses can be strengthened by this because it permits its shareholders to evaluate the individual value of Qualcomm as an alternate to an agreement with Broadcom. As investors presumed the new deal with NXP as increasing the chances of Qualcomm deterring Broadcom, the formers shares declined 1.30% to US$63.99, noticeably lower than the latter’s latest US$82 per share cash-and-stock offer, which it introduced on Feb. 5, 2018.
Broadcom stated on Tuesday that it was assessing its options in relation to Qualcomm's move and stated that the revised price for NXP was significantly more than what the company has characterized as full and fair, repeatedly. It called the new agreement a transfer of value to NXP shareholders from Qualcomm shareholders. In an interview, Tom Horton, the presiding board director of Qualcomm, argued that the revised agreement with NXP represented the value for Qualcomm shareholders regardless of the outcome of the takeover clash with Broadcom. “It makes our company stronger and more lucrative and diversified if there is no agreement with Broadcom,” added Horton.