Broadcom Limited is presently consulting with advisers over a potential bid to acquire Qualcomm, Bloomberg reported on Friday, citing people with knowledge of the ongoing discussions. No concrete decisions on the matter have yet been reached and it’s currently unclear what conditions would the semiconductor company be prepared to offer to Qualcomm and what level of a bid would the San Diego, California-based tech giant be prepared to consider.
Formerly known as Avago Technologies, Broadcom Limited was created last year after Singapore-based Avago acquired Broadcom Corporation for $37 billion. The company designs, develops, and utilizes various semiconductor technologies targeting a broad range of markets and started operating in 1961 as part of Hewlett-Packard. The two separated in 1999 when HP’s former division became known as Agilent Technologies which changed its name to Avago Technologies after being acquired in 2005 by KKR and Silver Lake Partners for $2.6 billion. The semiconductor firm has a long history in the industry and a tradition of not staying too attached to one particular name, and with Avago presumably adopting Broadcom’s moniker due to the latter having a more established name, a potential tie-up with Qualcomm could also see Qualcomm’s name live on. Such a scenario appears to be far from realistic for the time being, with the acquisition still being in early stages of consideration and subject to heavy regulatory scrutiny in numerous jurisdictions even if the two ultimately manage to reach an agreement.
With Qualcomm’s market cap currently being north of $91 billion, any scenario in which the firm is acquired would likely mark the largest purchase of a chipmaker ever and one of the largest in the tech industry overall. The American company is also presently in the process of wrapping up its own major acquisition as it awaits regulatory approvals of its proposed bid to take over automotive chip manufacturer NXP Semiconductors. Despite its current outlook for the fiscal year 2017 being slightly lower than previously expected over numerous patent disputes with Apple, Qualcomm is continuously strengthening its portfolio and investing in key technologies that could shape the global economy for the next decade and beyond, with the firm aggressively pursuing advancements in every emerging segment from advanced wireless communications to autonomous vehicles.