The takeover of Qualcomm has been announced – once it goes through, expect that more employees will decide that not selling their house is a good idea:
Broadcom Ltd. is considering a bid of more than $100 billion for Qualcomm Inc., according to people familiar with the matter, in what would be the biggest-ever takeover of a chipmaker.
Broadcom is speaking to advisers about the potential deal, said the people, who asked not to be identified because talks are private. The offer of about $70 a share would include cash and stock and is likely to be made in the coming days, the people said. A final decision on whether to proceed has not been made, they said.
Broadcom Chief Executive Officer Hock Tan is a voracious acquirer, and heâs played a key role in a wave of consolidation engulfing the $300 billion semiconductor industry over the last three years. Broadcom, created in 2016 when Avago Technologies Ltd. acquired Broadcom Corp. for $37 billion, has built itself from a former Hewlett Packard division into one of the largest chipmakers via a string of purchases. Tan has said he wants more deals, a strategy that could be limited by opposition from U.S. regulators.
Broadcom, a major supplier of iPhone parts that counts Apple among its largest customers, said this week it will return its headquarters to the U.S. from Singapore. The company already lists San Jose, California, as a corporate co-headquarters.
Qualcomm finds itself in a weakened state. A legal battle with Apple is costing revenue and jeopardizing a business model that for years made Qualcomm one of the most successful chipmakers. Before today, its shares had slumped 16 percent this year, compared with a 41 percent surge in the Philadelphia Semiconductor Index.
A change of management at Qualcomm might help resolve the dispute with Apple more quickly, and thereby make Qualcommâs licensing and chip businesses more valuable, according to Sanford C. Bernstein & Co. analyst Stacy Rasgon. Earlier this week, Qualcomm executives said the legal process would “proceed under the courtâs schedule,â indicating no resolution soon.
âMaybe they have a better relationship with Apple, maybe they settle,â Rasgon said.
At issue between Qualcomm and Apple are licensing fees the chipmaker charges for patents that cover the basics of how mobile phone systems work. Apple contends Qualcomm is unfairly charging too much and illegally taking advantage of its market position in chips. Qualcomm has countered that Apple, one of its largest customers, has lied to regulators in an unfair attempt to bully its opponent into charging less.
Qualcomm, based in San Diego, is also confronting headwinds in closing its $47 billion purchase of NXP Semiconductors NV. The deal is facing regulatory scrutiny in Europe and opposition from some shareholders including activist hedge fund firm Elliott Management Corp., which has argued the offer undervalues NXP.
Jim, I think you’re completely right for the near-term. If this deal closes though, I wonder A) If there will be some significant cost-cutting as they’re rival companies and probably some significant operational overlap, and B) Since they’re in the process of relocating their entire HQ to San Jose, if they’ll move some of the Qualcomm jobs north. Will be interesting to see how this all pans out!
Related to this and the previous thread. No more tax free municipal debt for stadia.
Will be interesting to see how this all pans out!
Indeed, and we’ll see how the long-term employees react when shares are selling for 70+ when they touched 50 on Tuesday! It might be a good time to cash out, rather than move to San Jose, especially for those who have younger kids. Sure, they can sell their house here for a tidy profit, but then go to an area where values are 2x and start over in new schools?
It will be tempting to stay put instead. Call it the Mickelson effect – even if it made sense to move, not-pulling-kids-from-schools will likely prevail.
Related to this and the previous thread. No more tax free municipal debt for stadia.
Heck, we don’t even have a team any more! đ
We might get a pro soccer team out of the ashes of Qualcomm Stadium though. Whoopie!
But it probably won’t beat my favorite boon-doogle of all time. Cal State Fullerton built a new football stadium back in the 1980s, and then cancelled the football program the next year.
Modest houses in SJ if you can find one, rent for $6k/mo. You can burn all your SD house sale appreciation up there before the kids get out of high school. And the traffic!
Cash out the stock at $70/share and commute to SF. It is only a 1 hr flight.
Rental houses in San Jose range from around $3,000 to $5,000. $4,000 gets you something decent. Given the North San Jose location, Milpitas and Fremont are within commuting distance. Prices are similar to slightly lower.
The lack of inventory is the real problem. Moving a lot of new employees in will compound that.
Some folks will retire or find another job, some will be laid off, and some more valuable employees may negotiate remote, work from home deals. The rest will have to suck it up and move if the Qualcomm HQ shuts down.
Amazon is not coming, Qualcomm is leaving…I have a bad feeling about this.
Amazon was never coming, Qualcomm has too much upper management, they in the long run will be a lean and mean machine which will last longer here in SD county, sure there is gonna be consolidation, always happens, no big for the long run.
Qualcomm Inc. is preparing to fend off an unsolicited $100 billion takeover bid from Broadcom Ltd., arguing it undervalues the company, people familiar with the plans said.
Broadcom is preparing a $70-a-share offer for Qualcomm, which could come as soon as Monday, said the people, who asked not to be identified because the plans are private. Qualcomm will argue that the proposal, the largest-ever technology acquisition, is an opportunistic move to buy the chipmaker on the cheap, the people said.
While Qualcommâs board and management will give the offer due consideration, the San Diego-based company will likely recommend that shareholders reject it, the people said. This would force Broadcom to pursue a proxy fight if it wishes to proceed. A Qualcomm spokesman declined to comment, and Broadcom didnât immediately respond to a request for comment.
Qualcomm will make the case to shareholders that, in addition to a possible battle with the board, Broadcom may also face challenges from regulators, the people said. Broadcom has been trying since last year to secure approval for its purchase of Brocade Communications Systems Inc., a substantially smaller deal. Qualcomm is likely to argue that a regulatory limbo could put it on a prolonged and uncertain path that would cast doubt on the value of the deal, the people said.
The combination of Broadcom and Qualcomm would create a colossus that controls key pieces required for any company that wants build a smartphone. Meanwhile, Qualcomm is in the process of acquiring NXP Semiconductors NV, another major chip supplier. If those two join Broadcom, it would be the worldâs third-largest chipmaker, with huge sway over the supply chain for phones and a growing presence in connected cars and data centers.
https://www.bloomberg.com/news/articles/2017-11-06/qualcomm-is-said-to-brace-for-a-fight-over-broadcom-s-deal-plan
Broadcomm has announced they are moving their HQ from Singapore to US. Do you think there is any chance that Broadcomm would look to make its new HQ in San Diego versus San Jose?
Do you think there is any chance that Broadcomm would look to make its new HQ in San Diego versus San Jose?
They should for the employees’ sake!
Amazon is not coming, Qualcomm is leavingâŚI have a bad feeling about this.
Please do not worry – I have time to help everyone! đ
Would Amazon have come here if SD just gave them the Q. Just the whole stadium and parking and everything. Just give them a 50 year lease on the land for $1 and let them build whatever they want.
For my daily heckle, I think a glaring similarity we have to “the gilded age” is the abundantly noticeable monopolies we enjoy today, and it ain’t slowing down. The young people don’t remember, but *I* happen to remember when monopolies sucked. They still do, kids. It’s not different this time.
I just don’t know if Trump’s the guy who’s gonna be riding herd on separating these golden monopobrats. Especially the evil ones who enjoy Satan as their copilot, lookin’ at you, Zuckerberg, and I know many with considerable stock holdings would respond with “wait! no! please! it’s too hard!”, but I would retort that most good things worth doing is hard to do, and it’s about time to get the party… started.
https://www.youtube.com/watch?v=tbad22CKlB4